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CVER Briefing Note
Further analysis of the earnings differentials associated with BTECs
Gavan Conlon, Sophie Hedges and Pietro Patrignani
February 2018
Paper No' CVERBRF006:
Full Paper (pdf)

JEL Classification: I26; J21; J31; J64

Tags: vocational education; administrative data; returns to education

We analyse whether there is an earnings differential associated with having a BTEC qualification as a young person’s highest qualification. Previous analyses of wage differentials using survey data on a sample of all working age individuals have shown positive returns for BTEC qualifications for both males and females. More recently, using matched administrative data for a group of young individuals in England, we showed positive earnings differentials for women in possession of BTECs, but failed to observe any positive differentials for males. In this study we investigate further the characteristics of young individuals in possession of BTEC qualifications and estimate earnings differentials compared with a range of different counterfactuals. An analysis of the characteristics of learners in possession of vocational qualifications show that the group of individuals with BTECs typically have higher levels of prior attainment at school and a higher proportion are from BAME backgrounds compared with individuals in possession of other vocational qualifications at the same level. Moreover BTECs act more often as a stepping stone to learning at higher levels (including degree level) compared with other vocational qualifications. When we consider those with BTECs as their highest qualification, we find that earnings differentials are strong and positive for females across all specifications, while they are positive for males only when compared to individuals in possession of BTECs at the level of the RQF immediately below or to individuals enrolling in the same qualification but failing to achieve.