Classroom versus workbench: Labour market effects of firm-based learning

This study assesses the labour market effects of firm-based (or dual) vocational education and training (VET), i.e. when training takes place in a firm rather than in a school. Using Swiss administrative data, I compare the school-to-work transition between graduates of dual and school-based VET, both of whom have the same curriculum and diploma. To identify the causal effect, I rely on an instrumental variable strategy, using the distance to the nearest full-time VET school as instrument. The empirical analysis shows that dual VET is more effective in securing first employment, especially in occupations with loose labour market conditions as well as for men. However, dual VET graduates are less likely to progress to higher education, suggesting that both forms of VET have a comparative advantage. As for causal channels, heterogeneous results indicate that dual VET is particularly effective in developing noncognitive skills.