The Economic Value of Intermediate Vocational Educational Qualification (UKCES, Dec 2009)

Friday 05 February 2010Comment on this article Permlink

New Report – Vocational Qualifications Can Boost Earnings.

This report finds that some VQs lead to large pay increases, but benefits are not universal.

A new report published in December 2009 reports that vocational qualifications, often viewed as the poor relation in the qualifications framework, frequently have value in the labour market.

However, the differences in the pay increases generated between types and levels of vocational qualifications are considerable, being strongly influenced by the type of qualification and the method by which it is acquired.

Research conducted by the University of Sheffield and published by the UK Commission for Employment and Skills shows that:

Apprenticeships provide significant benefits, with average earnings increasing by up to 22 per cent following the completion of a Level 3 (equivalent to A-level) apprenticeship compared with a Level 2 apprenticeship. As National Vocational Qualifications (NVQs) are an integral part of apprenticeships, the report suggests that “these results suggest an effective means of delivering NVQs”
City & Guilds, RSA, BTECs and some other vocational qualifications also result in significant average pay increases of between five and 23 per cent
The pay increases associated with NVQs are more variable. When individuals acquire a new Level 2 NVQ as their highest qualification, the most recent evidence (for England only) shows they earn on average four per cent more than someone with no qualifications. However, this figure hides wide variations between sectors, as NVQs in certain sectors, such as construction, frequently result in large pay rises, whilst others, such as finance, do not. Variations are also evident between occupations, with those in skilled occupations and personal services reporting relatively high wage increases
The way in which a learner achieves a qualification also appears to affect their earning power. Those who obtain an NVQ through their employer earn some 10% more than those with no qualifications (England only). Yet obtaining the same NVQ via a college or government training scheme does not, on average, result in any such increase. The report also finds some evidence to suggest that the returns to intermediate vocational qualifications held as highest qualifications are improving over time.

The report concludes that, “When individuals acquiring intermediate vocational qualifications are compared to only lower qualified individuals and particularly when compared to lower qualified individuals in the same occupation or industry, then positive returns to intermediate vocational qualifications are observed.”

Chris Humphries, Chief Executive of the UK Commission for Employment and Skills, said: “Vocational qualifications have long been considered the poor relation to their academic counterparts, but this research shows that many vocational qualifications provide real and tangible benefits to both employers and individuals, sometimes providing pay increases which nearly match those expected from academic qualifications.

“This is particularly remarkable when you consider that academic qualifications usually take much longer to achieve. The most successful qualifications tend to be those which are work-based, from long-established awarding bodies, for low-skilled individuals, and for those in skilled occupations and personal services.

“These findings have important implications for the future, as they support a general policy of raising adult skills through the employer route and concentrating most effort on those with low or no qualifications.

“Even though returns have been improving over the last five years, there is still plenty of scope for improvement, and the challenge is now to get all vocational qualifications matching the returns we’re already seeing from the best.”

Click here to download the report.