This second report seeks to understand how taking a vocational qualification affects young people’s career prospects and progression into higher education.
The UK has struggled over many years to provide the right balance of academic and vocational education to suit the choices of young people and the needs of the economy. In particular, vocational education has been under-valued and treated as second-best to academic qualifications.
In an attempt to correct the imbalance, successive governments have sought to expand and improve opportunities in vocational education. This research is the second of two reports on vocational education. It provides analysis of how vocational qualifications support young people in building their careers by examining trends in young people with vocational qualifications going into higher education, and by analysing the returns of different vocational qualifications to employment prospects and earnings.
Progression into higher education
By analysing the latest data from UCAS and HESA, we looked at rates of progression into higher education for young people with different types of qualification. We found that:
- Almost 100,000 students (1 in 4) entering university now have a BTEC qualification compared to just under 50,000 in 2008.
- Acceptance of those with BTECs and a combination of BTECs and A levels is increasing rapidly and the proportion has almost doubled in the last eight years. In 2008 just 14% of those accepted into higher education had a BTEC – in 2015 more than a quarter (26%) did.
- There is a big increase in students with BTECs, and with a combination of A levels and BTECs, entering university from the most disadvantaged areas. Between 2008-2015 students entering higher education from the most disadvantaged backgrounds with just A level qualifications increased by 19%. However, those with BTECs increased by 116%. Those combining both A levels and BTECs increased by 340%, albeit from a low base.
- For young people taking A levels, prospects for progression into higher education depend heavily on where they are from. For young people taking BTECs, or a combination of BTECs and A levels, entry rates are much more even across areas.
- Increasing numbers of young people taking at least one vocational qualification at Key Stage 5 have very good GCSE results. In 2015, 37% of young people taking a Key Stage 5 vocational qualification had at least 5 A* to C GCSEs or equivalents. Increasing numbers of young people taking BTECs or a combination of BTECs and A levels are also achieving high grades at Key Stage 5, and then progressing into higher education.
- Nevertheless, these high achievers are so far more likely to go to ‘lower tariff’ (less selective) higher education institutions. The most selective universities are still choosing ‘high achieving’ students who have taken A levels. In 2015, just 2% of 18 year old acceptances into higher tariff institutions had BTECs at grade ABB or above.
Employment outcomes for those not going into higher education
We also analysed the employment and earnings prospects of those taking vocational qualifications but not going into higher education. Using the latest data from the Quarterly Labour Force Survey, we looked at employment outcomes for those with vocational qualifications at Level 2 and 3 as their highest qualification. We found:
- Those with vocational Level 2 qualifications as their highest qualification, and particularly those with vocational Level 3 qualifications as their highest qualification, are more likely to be employed than the 16-65 year old population generally.
- Having a vocational Level 2 qualification as one’s highest qualification, compared to a vocational Level 1 qualification, is associated with an 8% increase in the likelihood of being in employment, after controlling for other factors. The effect is even stronger – at 11% – for women.
- Having a vocational Level 3 qualification as one’s highest qualification, compared to having a vocational Level 2 qualification as one’s highest qualification, is associated with a 15% increase in the likelihood of being in employment. The effect is again even stronger – at 17% – for women.
- Furthermore, having a vocational Level 3 qualification as one’s highest qualification, compared to having a Level 2 qualification as one’s highest qualification, is associated with a 7% increase in weekly earnings. The effect is strongest for men.
Employment outcomes for those with vocational qualifications and going into higher education
We then analysed the earnings prospects of young people who had taken a BTEC at Level 3 and then went into higher education. Using the latest Quarterly Labour Force Survey data, we found:
- Those with a BTEC and a degree have an hourly earnings premium of 20% compared to those with a BTEC as their highest qualification.
- Those with a BTEC and a degree have a gross weekly earnings premium of 22% compared to those with a BTEC as their highest qualification.
Our previous report demonstrated that the binary divide between academic and vocational qualifications is breaking down. Many more pupils are taking both types of qualifications; and an increasing proportion of young people who are meeting the standard of 5 GCSEs at A*-C are going on to take vocational qualifications too.
This report supports these findings. It shows that increasing numbers of young people are going into higher education with BTECs, and that the increase is particularly pronounced for young people taking a combination of BTECs and A levels.
Entry into higher education for those with BTECs is growing particularly fast for young people from disadvantaged backgrounds. Large differences in entry rates exist between areas for young people with A levels; but entry rates for those with BTECs or a combination of BTECs and A levels are much more equal across areas.
There are also sizeable wage premiums associated with vocational qualifications. People with Level 3 vocational qualifications command significantly higher wages than those with only a Level 2. Those with a Level 3 BTEC and a degree command even higher wage premiums.