More investment needed for young people that don’t go to university
Steve argued that the UK should invest more in the vocational and technical education of young people that choose further education rather than the academic route of higher education.
He presented data that showed there is a demand in the economy for more workers with specialist technical knowledge and skills in skilled manual roles, given the shortage of suitably-skilled individuals reported by the employers of such workers.
However, only 9% of young people that take level 3 vocational qualifications, and 2% that take Level 2 qualifications, then go on to more advanced vocational education at Levels 4 and 5.
Steve showed that prior attainment and family background are key determinants of choice of route in further education, and presented new research with PhD student Konstantina Maragkou that showed that the peers we go to school with (as measured by their socio-economic background, their academic ability and their aspirations) influence our decisions whether to do further education in a vocational or technical setting or on a more academic route.
Steve went on to highlight the job roles that are in demand in the economy and the ones that have been affected by technology. He identified medium-skilled production jobs and administrative jobs that have been the worst hit by technology and automation.
Apprenticeships have repeatedly shown to be associated with much higher earnings differentials.
Prof Steve McIntosh
Department of Economics
In the future, lower-skilled service sector jobs are likely to be threatened, such as driving, cleaning, retail and call centres roles, in addition to some higher-skilled jobs such as accountants and law clerks.
It is the case that the economy will create demand for new jobs that don’t yet exist. For example, ten years ago there were virtually no jobs as App Developers or Social Media Managers. Nevertheless, at a minimum, it is clear that individuals who follow the vocational route will have to be prepared for forthcoming change, and that many jobs currently available in the service sector will disappear.
The final part of Steve’s lecture was on the wage returns to education. Steve said that some of his earlier work estimated that the wage returns to lower-level vocational education (such as Level 2 NVQs or City and Guilds) give small or zero returns, only reaching a level of around 10% higher wages in a few select areas such as engineering and construction.
Apprenticeships, on the other hand, have repeatedly been shown to be associated with much higher earnings differentials. This is part of the reason why all political parties now advocate apprenticeships as the major part of their non-university education programme.
Individuals of all ages can now do apprenticeships in England. Steve finished his lecture by describing his recent research showing that younger apprentices aged 19-24 receive a higher return of between 12-22% growth in their earnings, compared to apprentices aged 25 and over who experienced a 6-8% average earnings increase. This suggests it is important to ensure that apprenticeships at all levels and for all ages remain of sufficient quality.
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