Vocational education in Israel: Wage effects of the VocEd-occupation match

In an earlier paper based on Israeli census data, the authors showed that vocational school completers achieved higher earnings than their counterparts who attended academic secondary schools, but only if they worked in occupations related to the vocational course of study pursued. These findings were challenged by Lawrence Hotchkiss; using U.S. follow-up data from the High School and Beyond survey, he argued that the wage advantage of vocational school completers working in related occupations stemmed from employment in a well-paid occupation (a possibility not examined in our earlier estimating model) and was not the result of the training received. In this paper, we replicate the U.S. study using our Israeli data base; the results strongly confirm those from our earlier study. How may the contrasting results for Israel and the United States be explained? We suggest that the U.S. study may be faulted; its focus on young workers in their first job after graduation, may have led to unduly pessimistic results with regard to the labor market outcomes of vocational schooling.