The focus of individual projects over the three-year research program will be to study the position of VET in relation to a number of labour market processes and specific sub-groups of the labour force. The study of dynamic processes using panel estimation methods features prominently in this research program as does counterfactual analysis to compare different groups at single points in time as well as specific groups over time.
In the first year of the program there will be four projects undertaken.
Project 2008-1: Analysis of private returns to VET
This project will investigate the private returns to VET. It will utilise new data sets, will update existing estimates and compare them with the estimates of alternative/competing education routes. This project will address the following questions:
* How do returns to VET qualifications in Australia vary by type of qualification and gender?
* What are the returns to VET qualifications in Australia for more mature age students who obtain their qualifications later in life? How do they compare to the returns to students who obtain their qualifications when they are younger?
* Have the returns to VET qualifications in Australia changed over time during the period 1993 to 2005?
Project 2008-2: Incidence and Wage Effects of Overskilling
This project will investigate the degree of skill utilisation by those with VET qualifications once they have entered employment. It will use the first six waves of the HILDA survey to estimate the level of overskilling and mismatch at work for persons with different education levels. The research questions to be addressed by this project are:
* Do employees holding trade certificates and apprenticeships have a higher / lower probability of being severely or moderately overskilled in their job relative to employees holding all other credentials as they are identified by the HILDA data?
* To what extent does the severity of any overskilling wage penalty vary across these two groupings.
* Do the patterns observed with respect to questions 1 and 2 vary by gender and broad industry.
* The extent to which the probability of overskilling varies by vocational trade.
* The extent to which the severity of the overskilling wage penalty varies across trade occupations.
Project 2008-3: Labour Market Dynamics - The Role of VET
This project will investigate the role of VET as a (start of the career) choice of young labour market participants and relates VET provision to those outcomes that are crucial for the building of their life long (or, at least, longer term) human capital (e.g. casual, fixed term, part time or full time employment) using dynamic panel estimation methods. The research questions to be addressed by this project are:
* How much does participation in VET in a previous period affect the probability of being unemployed in a future period?
* How much of this observed effect is the result of VET per se (i.e. 'genuine') and how much of this observed effect is attributable to preferences and other unobserved characteristics (i.e. 'spurious')?
Project 2008-4: The role of education in labour market outcomes of people with disabilities
This project will investigate the role of VET regarding the labour market outcomes of people with disabilities. The project will use data from the Australian Bureau of Statistics (ABS) 2003 Survey of Disability, Ageing and Carers (SDAC03) as well as from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Data from the Longitudinal Survey of Australian Youth (LSAY) may also be used. The research questions to be addressed by this project are:
* What are the employment restrictions that people with disabilities face in the labour market? Do people with disabilities who have completed a VET qualification experience similar employment restrictions?
* For people with disabilities, does completion of VET qualifications depend on any socio-economic or unobserved factors (i.e. motivation)?
* How do people with disabilities with VET qualifications differ from people with disabilities with no post-school qualifications in terms of severity, type and age of onset of their disability?
* After controlling for socio-economic characteristics and unobserved personal factors (i.e. motivation and preferences), does completion of VET qualifications have a statistically significant impact on the probability of employment for people with disabilities?
* Does the impact of VET qualifications (on probability of employment) have the same magnitude across different types and severity of health conditions?
* Does participation completion of VET play a significant role in the degree of labour force attachment of people with disabilities?
Research questions for 2009/2010 will be finalised when the 2009 and 2010 work and finance plans are negotiated. The 2009/10 projects currently proposed (see Item 4 for further detail) aim to investigate further aspects that can assist the design of evidence-based policy.
The projects will employ the application of quantitative statistical methods.
Project 2008-1: Analysis of private returns to VET
Using the ABS Surveys of Education and Training (1993, 1997, 2001 and 2005), this project will employ two possible econometric modelling techniques:
(i) Multivariate regression techniques: where the outcomes are discrete (for example, whether an individual works full-time or not, or has a permanent or casual job), probit estimation can be undertaken; where the outcomes are continuous (such as wages or some occupational outcome measures), least squares regression can be used.
(ii) More recently developed program evaluation techniques such as propensity score matching will also be used. This method is designed to provide a better answer to the 'what if' question. Propensity score matching is a semi-parametric alternative to regression and allows us to relax the implicit linear functional form assumption in regression.
Project 2008-2: Incidence and Wage Effects of Overskilling
This project will use the first six waves of HILDA (2001-2006) and will consist of a comparative study of individuals holding apprenticeships and trade certificates, where such credentials represent their highest level of attainment, and employees holding all other credentials as they are identified by the HILDA data. Panel data methods and propensity score matching techniques will be applied appropriately.
Project 2008-3: Labour Market Dynamics - The Role of VET
Using data from the Longitudinal Surveys of Australian Youth (LSAY), desciptive analysis of relevant data will be undertaken followed by the economic modelling where the role of VET will be made explicit by putting it on par with other labour market outcomes (e.g., employment or unemployment).
Project 2008-4: The role of education in labour market outcomes of people with disabilities
This project will utilise data from the ABS 2003 Survey of Disability, Ageing and Carers (SDAC03); HILDA and possibly LSAY. Both descriptive and multivariate statistical methods will be used to analyse the data.
Located within the Faculty of Economics and Commerce at The University of Melbourne, The Melbourne Institute of Applied Economic and Social Research is a leading research organisation specialising in applied economic and social research with an international reputation for producing high quality research related to Australian policy issues. Its mission is to undertake world-class independent and impartial applied economic and social research and policy analysis on major issues relevant to Australia; provide highly valued products and services for business, government and community groups; and provide research training for emerging economic and social researchers.
