Incorporating vocational training systems in CGE models

Technical education and vocational training (TEVT) represents one of the essential determinants of human capital growth and sustainable development. Moreover, it is considered as a suitable remedy for improving the knowledge and productivity levels of individuals and societies. A recursive-dynamic CGE model provides a well-suited toolkit for evaluating the effects of public spending on the conventional education and vocational training systems in the agricultural sector. Furthermore, the developed model attempts to capture the medium and long-term influences of the government policies on human capital growth, households’ welfare, labour markets and the production structure of the economy. The approach explicitly involves different types of education; including primary, secondary, tertiary and TEVE. Nevertheless, this model classifies the labour market based on their education and training skills as well as their potentials. It also considers the possibility of change on the educational outcomes affects the total number of workers in the economy. The results showed that an increase in the education investment have negative impacts on the supply of highly qualified workers and hence the gross domestic products (GDP) in the short term. On the other hands, the supply of low qualified workers declined dramatically in the medium to long term. Keywords: Vocational training, DCGE, education, public spending, agriculture