Study of the Week: Trade Schools Are No Panacea

You will likely have encountered the common assertion that we need to send people into trade schools to address problems like college dropout rates and soft labor markets for certain categories of workers. As The Atlantic recently pointed out, the idea that we need to be sending more people to trade and tech schools has broad bipartisan, cross-ideological appeal. This argument has a lot of different flavors, but it tends to come down to the claim that we shouldn't be sending everyone to college (I agree!) and that instead we should be pushing more people into skilled trades. Oftentimes this is encouraged as an apprenticeship model over a schooling model.

I find there's far more in the way of narrative force behind these claims than actual proof. It just sounds good - we need to get back to making things, to helping people learn how to build and repair! But... where's the evidence? I've often looked at brute-force numbers like unemployment numbers for particular professions, but it's hard to make responsible conclusions with that kind of analysis. Well, there's a big new study out that looks in a much more rigorous way - and the results aren't particularly encouraging.

Today's Study of the Week, written by Eric A. Hanushek, Guido Schwerdt, Ludger Woessmann, and Lei Zhang, looks at how workers who attend vocational schools perform relative to those who attend general education schools. Like the recent Study of the Week on the impact of universal free school breakfast, this study uses a difference-in-difference approach to explore causation, again because it's impossible to do an experiment with this type of question - you can't exactly tell people that your randomization has sorted them into a particular type of schooling and potentially life-long career path, after all. The primary data they use is the International Adult Literacy Survey, a very large, metadata-robust survey with demographic, education, and employment data from 18 countries, gather from 1994 to 1998. (The authors restrict their analysis to the 11 countries that have robust vocational education systems in place.) The age of the data is unfortunate, but there's little reason to believe that the analysis here would have changed dramatically, and the data set is so rich with variables (and thus the potential to do extensive checks for robustness and bias) that it's a good resource. What do they find? In broad strokes, vocational/tech training helps you get a job right out of school, but hurts you as you go along later in life:

(don't be too offended by excluding women - their overall change in workforce participation made it necessary)

Most important to our purpose, while individuals with a general education are initially (normalized to an age of 16 years) 6.9 percentage points less likely to be employed than those with a vocational education, the gap in employment rates narrows by 2.1 percentage points every ten years. This implies that by age 49, on average, individuals completing a general education are more likely to be employed than individuals completing a vocational education. Individuals completing a secondary-school equivalency or other program (the “other” category) have a virtually identical employment trajectory as those completing a vocational education.

Now, they go on to do a lot of quality controls and checks for robustness and confounds. As much of a slog as that stuff is, I recommend you check some of that out and start to pick some of it apart. Becoming a skilled reader of academic research literature really requires that you get used to picking apart the quality controls, because this is often where the juicy stuff can be found. Still, in this study the various checks and controls all support the same basic analysis: those who attend vocational schools or programs enjoy initial higher employability but go on to suffer from higher unemployment later in life.

What's going on with these trends? The suggestion of the authors seems correct to me: vocational training is likely more specific and job-focused than general ed, which means that its students are more ready to jump right into work. But over time, technological and economic changes change which skills and competencies are valued by employers, and the general education students have been "taught to learn," meaning that they are more adaptable and can acquire new and valuable skills.

I’m not 100% convinced that counseling more people into the trades is a bad idea. After all, the world needs people who can do these things, and early-career employability is nothing to dismiss. But the affirmative case that more trade school is a solution to long-term unemployment problems seems clearly wrong. And in fact this type of education seems to deepen one of our bigger problems in the current economy: the speed of technological change moves so fast these days that it's hard for older workers to adapt, and they often find themselves in truly unfortunate positions. Even in trades that are less susceptible to technological change, there's uncertainty; a lot of the traditional construction trades, for example, are very exposed to the housing market, as we learned the hard way in 2009. Do we want to use public policy to deepen these risks?

In a broader sense: it's unclear if it's ever a good idea to push people into a particular narrow range of occupations, because then people rush into them and... there stops being any shortage and advantage for labor. For a little while there, petrochemical engineering seemed huge. But it takes a lot of schooling to do those jobs, and then the oil market crashed. Pharmacy was the safe haven, and then word got out, a ton of people went into the field, and the labor market advantage was eroded. Also, there are limits to our understanding of how many workers we need in a given field. Some people argue there's a teacher shortage; some insist there isn't. Some people believe there's a shortage of nurses; some claim there's a glut. If you were a young student, would you want to bet your future on this uncertainty? It seems far more useful to me to try and train students into being nimble, adaptable learners than to train them for particular jobs. That has the bonus advantage of restoring the "practical" value of the humanities and arts, which have always been key aspects of learning to be well-rounded intellects.

My desires are twofold. First, that we be very careful when making claims about the labor market of the future, given the certainty that trends change. (One of my Purdue University students once told me, with a smirk, that he had intended to study Search Engine Optimization when he was in school, only to find that Facebook had eaten Google as the primary driver of many kinds of web traffic.) Second, that we stop saying "the problem is you went into X field" altogether. Individual workers are not responsible for labor market conditions. Those are the product of macroeconomic conditions - inadequate aggregate demand, outsourcing, and the merciless march of automation. What's needed is not to try and read the tea leaves and guess which fields might reward some slice of our workforce now, but to redefine our attitude towards work and material security through the institution of some sort of guaranteed minimum income. Then, we can train students in the fields in which they have interest and talent, contribute to their human flourishing in doing so, and help shelter them from the fickleness of the economy. The labor market is not a morality play.