The Impact of Grade 11 & 12 at Technical and Vocational High School on Labor Market Performance in the Philippines

1. The Effect of Grade 11 & 12 at Technical and Vocational High School on Labor Market Performance in the Philippines (Preliminary Results) By Izumi Yamasaki Presented by Izumi Yamasaki, Ph.D. Gakushuin University, Japan/ JICA Research Institute

2. Contents • Background • Research Questions / Hypotheses • Literature Review • Identification Strategies • Data /Survey • Preliminary Results • Next Steps

3. Background 1 • The Philippines was the only country that has only four years of secondary education in Asia. • The Government of the Philippines decided to introduce the K to 12 (K-6-4-2) Program to raise the levels of education of workers and achieve EFA and MDGs from 2016/17. • As pilot schools about thirty high schools started a new education system from 2012/13. (Japan International Cooperation Agency, 2014; The Philippine Government, n. d.)

4. Background 2 • Also, the Government of the Philippines thinks it is important to attract manufacturing companies and enhance labor force for manufacturing in order to achieve labor absorption and income growth for low-income population. • Therefore they put a strong emphasis on technical and vocational education in secondary education. 　　　　　　　　　　　　　 　(NNA.ASIA 2014.10.17)

5. Background 3 Basic Education Statistics and Unemployment Rates Source: World Bank. (2016). World DataBank World Development Indicators. Washington DC: World Bank

6. Research Questions • To what extent do additional two years of education at grade 11 & 12 at technical and vocational (tec-voc) high school help graduates to get employed in the Philippines? • To what extent do additional two years of education at grade 11 & 12 at tec-voc high school contribute to earnings of the graduates in the Philippines?

7. Hypotheses • Among those who were at grade 10 at tec-voc high school, additional two years of education at grade 11 & 12 at tec-voc high school increase the probability of being employed. • Among those who were at grade 10 at tec-voc high school, additional two years of education at grade 11 & 12 at tec-voc high school increase future earnings.

8. Literature Review：Employment Hanushek, Woessmann & Zhang (2011)：Analyzed the effects of general and vocational education on employment using micro data from 18 developed countries. Find that the positive effect of vocational education on employment decreases with age.

9. Literature Review：Return to Schooling 1 Comparison with general course at secondary school • Psacharopoulos(1994): Analyzed return to general and vocational courses for a number of countries including developing countries. Finds that social return to general course is 5% higher and private return to general course 1% higher than vocational course. • Bennell(1996):Reexamined the findings by Psacharopoulos（1987, 1994） and pointed out the methodological issues. Concluded that there is no statistically significant difference in social return to schooling between general and vocational courses.

10. Literature Review：Return to Schooling 2 Comparison with general course at secondary school • De Voretez(1969 cited in Bennell, 1996): Finds higher return to general course than vocational course at secondary education in the Philippines. [No relevant studies after this study] • Meer(2007): Examined the effect of vocational education at high schools on earnings in the United States. Finds that those who were at technical and vocational course would not earn more if they had not chosen this course.

11. Significance of the Study 1 • No one collect data on grade 11 & 12 at tec-voc high schools (pilot schools) in the Philippines as comprehensive as we did. • The first empirical study that evaluate the effect of grade 11 & 12 at tec-voc high schools (pilot schools) for the first time as far as we know. • No studies on the effect of secondary technical and vocational education on employment in the Philippines. • No studies on the effect of secondary technical and vocational education on earnings after De Voretez (1969).

12. Significance of the Study 2 • While initial vocational education and training receive more attention by policy makers and international organizations, there are not many empirical studies on this field around the world (OECD, 2010). • This study can contribute to empirical literature on initial vocational education and training.

13. Identification Strategies: Employment • Probit model: • Dependent variable: 1 if a graduate is employed, 0 is unemployed. • Independent variables: years of senior tec-voc high school education (1 if completed grade 11, 2 if completed grade 12), and other individual characteristics such as age, age squared, female dummy, and marital status dummy. • In the model that includes those who went to college or post secondary vocational training, we include college dummy, post secondary vocational training dummy. • Considered instrumental variable such as father’s years of education, mother’s years of education, distance to graduates’ high school when they are at grade 10, and whether they went to SHS modelling school. (However these instrumental variable don’t work after the exogeneity tests) • Included school fixed effects.

14. Identification Strategies: Return to Schooling • Baseline model:　Mincer earnings function (Mincer, 1974) • Dependent variable ｗ: log of hourly wage • Dependent variable: S is years of senior tec-voc high school education (1 if completed grade 11, 2 if completed grade 12), X is observable individual characteristics such as age, age squared, female dummy, and marital status dummy • In the model that includes those who went to college or post secondary vocational training, we include college dummy, post secondary vocational training dummy. • Also considered the same instrumental variable as probit model but these instrumental variable don’t work after the exogeneity tests. • Also included school fixed effects.

15. Data 1 • Data collected by JICA between March and August in 2015. • 2,189 graduates who were at grade 10 at 29 tec-voc high school in 2010/11, 2011/12 and 2012/13 and their households are interviewed. • 1,015 grade 10 graduates at 11 SHS modelling (treatment) schools and 1,174 grade 10 graduates at control schools.

16. Data 4 • A smaller number of sample in this study because I only look at those who are in the labor force to estimate employment and those who are employed to estimate earnings.

17. Survey 1 • Number of graduates planned to be interviewed * It does not mean that everyone who is at grade 10 at SHS modelling school proceeded to grade 11 & 12.

18. Survey 2

19. Survey 3

20. Survey 2 • Survey Completion Rate (Final)：　67.7%

21. Descriptive Statistics Note: Standard deviations are in the parentheses.

22. Results：Employment 1 Notes: (1) Robust standard errors are in parentheses. (2)* p<0.05, ** p<0.01, *** p<0.001 (3) The coefficients of covariates are not included here.

23. Results：Employment 2 Notes: (1) Robust standard errors are in parentheses. (2)* p<0.05, ** p<0.01, *** p<0.001 (3) The coefficients of covariates are not included here. Male Female

24. Results：Return to Schooling 1 Notes: (1) Robust standard errors are in parentheses. (2)* p<0.05, ** p<0.01, *** p<0.001 (3) The coefficients of covariates are not included here.

25. Results：Return to Schooling 2 Male Female

26. Summary and Interpretation 1 • Positive effect of grade 11 & 12 at technical and vocational high schools on employment for male. • No positive effect on employment for female and no positive effects on earnings for both male and female. • It is possible that high performers did not proceed to grade 11 & 12 and went directly to college or labor market.

27. Summary and Interpretation 2 • It is difficult to detect the effects of grade 11 & 12 with short term labor market outcomes because it will take those who went to grade 11 & 12 more time to enter the labor market. • It is also possible that the quality of grade 11 & 12 education is not satisfactory yet because the program has just started.

28. Next Steps 1 • Need to address selection into grade 11 & 12 better (propensity score matching, other instrumental variables) • Need to deal with selection into employment when we analyze earning outcomes. • Consider region variables such as macro economic variables and labor market variables.

29. Next Steps 2 • Look at descriptive statistics more in detail to find out what kind of career path that graduates from grade 10 at tec-voc high school have taken, and then reexamine the identification strategies. • Include more covariates from graduate, household and school surveys such as SES and school quality. • Improve the sampling of the endline (next) survey to deal with selection into grade 11 and 12.

30. References • Bennell, P. (1996). General versus vocational secondary education in developing countries: A review of the rates of return evidence. The Journal of Development Studies, 33(2), 230-247. • Hanushek, E. A., Woessmann, L. & Zhang, L. (2011). General education, vocational education, and labor-market outcomes over the life-cycle. NBER Working Paper 17504. Cambridge, MA: National Bureau of Economic Research. • Meer, J. (2007). Evidence on the returns to secondary vocational education. Economics of Education Review, 26, .559-573. • Mincer, J. (1974). Schooling, experience and earnings. New York, NY: National Bureau of Economic Research and ColumbiaUniversity Press. • OECD. (2010). Learning for jobs. Paris: OECD. • Pshacaropoulos, G. (1987). To vocationalize or not to vocationalize?: That is the curriculum question. International Review of Education, 33(2), 187-211. • Psacharopoulos, G. (1994). Investment in education: A global update. World Development, 22(9), .1325-1343.