Formal Employment

Figure 4.6 Associations between SCP Quality Determinants and Formal Employment

Internet available for faculty and students Has enough equipment or tools for practice Offers remediation classes while in the program HEI scholarship is available as funding option HEI has an employment center Industry lends / provides equipment to program for student training Class planning is very important in the faculty evaluation Percent of faculty with 5 years + industry experience Percent of <40 years old faculty HEI has governing body beyond rector / provost Interview is an admission requirement

−5 0 5 10 15

Percentage points

Infrastructure Costs and financing Faculty Curriculum and training Engagement with industry Other practices

Source: Dinarte et al. (2021). Note: The figure shows the change in the average probability that almost all graduates obtain formal employment (in percentage points) that is associated with the quality determinants. The estimation was done using only programs for which data were available on the probability that almost all graduates obtain formal employment and all the quality determinants. On average, 58 percent of the SCPs report that almost all their graduates are working in the formal sector. All variables are dummies except when noted. A positive coefficient denotes improvement; a negative association indicates worsening of the outcome. GPA = grade point average; HEI = higher education institution; SCP = short-cycle program.

Providing onsite internet access is associated with higher formal employment as well—presumably by facilitating students’ job search.

A second category of determinants associated with formal employment pertains to the curriculum category. Graduates from SCPs providing remediation support during the program (as opposed to not having it or having it before the program only) have higher formal employment rates. Conditional on completing the program, these classes seem to strengthen students’ training.

There is also a determinant associated with higher formal employment from a third category: costs and financing. Graduates from SCPs where students use HEI scholarships are more likely to be formally employed. As financial restrictions are eased by the availability of HEI scholarships, students are more likely to focus on completing their coursework and practical training, thereby consolidating their skill sets and improving their formal employment prospects.

The fourth category of determinants associated with higher formal employment is engagement with industry. There are mixed results here. On the one hand, programs in HEIs with an employment center report higher formal employment for their graduates. This is aligned to evidence that technical training, complemented with customized job search assistance, improves employment outcomes.29 On the other hand, programs that have agreements allowing students’ use of firms’ equipment for practical training report lower formal employment for their graduates. The literature finds that successful

vocational training includes well-designed contracts between training providers and local employers.30 Agreements that just allow students to use equipment might entail too little industry commitment and detract from other types of agreements.

Fifth, there are positive associations between faculty characteristics and formal employment. Programs with a higher share of faculty with industry experience report (slightly) higher graduates’ formal employment. In contrast, a higher share of young faculty is associated with (slightly) lower formal employment. Faculty with industry experience presumably know which skills are most relevant in the labor market and teach them, while young faculty may not be experienced enough for students’ needs.31 Moreover, programs where faculty evaluation depends highly on class planning report higher formal employment.

Finally, there are positive associations between the “other practices” category and formal employment. Requiring an interview for admission is associated with higher graduates’ formal employment. As the literature shows, selectivity can be associated with better employment outcomes.32

Two key lessons can be drawn from these findings. First, at least one practice from each quality determinant category seems to be positively associated with formal employment. Among these determinants, providing internet access to faculty and students is associated with the largest increase in formal employment (about 12 percentage points).

Second, some practices can have unintended effects on formal employment when they are substituting for others that may be more effective at improving graduates’ employability. For example, agreements with industry in which firms play a passive role, such as allowing students to use firms’ equipment, may be possibly substituting other forms of agreements where industry is more engaged, such as providing internship opportunities.

After accounting for quality determinants and other program and HEI characteristics, there is no association between administration type (public or private) and formal employment rates. Moreover, some associations between the quality determinants and employment in the formal sector are similar for public and private institutions (see figure 4B.3, in annex 4B). Such is the case of the association between faculty evaluation based on class planning and formal employment.

Wages

Figure 4.7 summarizes the main results on the associations between wages and the SCP quality determinants. Eight program determinants are associated with higher wages.

As with formal employment, the salaries reported for graduates from programs with sufficient materials for practical training—regardless of enrollment— are high compared with those reported for graduates from other programs. More opportunities for practical training may be providing students additional skills that are rewarded in the labor market through higher salaries.