Around the world, labor markets are continuously shifting, and COVID-19 accelerated the pace of those shifts. Education and training systems often have to play catch up. Regularly monitoring the progress of graduates in the labor market - known as tracer studies - can provide vital information for educators. In most cases, monitoring is done using dedicated surveys of graduates. However, this methodology can be expensive.
Administrative data: useful tool to analyze students’ outcomes
Administrative data provides a reliable and cost-effective source of information for tracer studies. One key advantage of using administrative data is that it lowers the time and cost of collecting data compared to dedicated surveys. Surveys are expensive and take time to implement. Therefore, it is difficult for governments to implement surveys with as much regularity as needed to monitor labor market needs. But there are other benefits of administrative data, such as providing data on all rather than a sample of graduates, which can be helpful when looking at disaggregated findings, and more precisely measuring income, which is often a problem with surveys.
Administrative data can be a powerful tool for timely analysis of students’ outcomes. In countries with high degree of integration and interoperability across IT systems, administrative data enables information-sharing among actors. Multiple administrative databases can be combined to provide real time labor market information, usually using a unique individual identification number – such as a social security number or national tax ID. Data can be linked and anonymized to be responsibly shared across institutions, safeguarding individual privacy, and ensuring its appropriate use for research purposes
Outcomes of Saudi Arabia’s graduates
A new paper quantifies outcomes of TVET graduates in Saudi Arabia using administrative data. The paper analyzes Saudi Arabia students’ short to medium term labor market trajectories using a rich matched employer-employee longitudinal dataset, compiling individual-level data from various administrative sources. It covers five cohorts of graduates from institutes operated by the Technical and Vocational Training Corporation (TVTC) who are formally employed in the private sector. The graduate record – covering 133,552 graduates – was combined with data from Saudi Arabia’s General Organization for Social Insurance (GOSI) and data from the Nitaqat system to gather labor market outcomes of graduates in the private sector. Roughly 68 percent of graduates appear in the private sector payroll.
On average, TVTC graduates experience a larger salary increase in the first job change – that is a 4.4 percent “job mobility premium.” However, there is an additional 3 percent “skill premium” if those job transitions take place after the individual completes a TVTC program. Subsequent job changes yield an additional 4 percent mobility premium, with a potential cumulative TVET and mobility premiums that can add up to 12 percent higher wages after two or more job transitions.
Monitoring relevance and effectiveness of TVET
As global trends continue reshaping the labor market and altering the combination of skills required by employers, the ability to overcome information scarcity and reduce skills imbalances will become a critical in workforce management. Building systems that are flexible and adaptable is essential in a constantly changing world of work – a world of work that will require of workers a commitment to continue learning new skills throughout their work lives. Developing tools and methods to monitor rapid changes in real time is an essential capacity for future-ready TVET and life-long learning systems. Closing the skills gap between education and the labor market is key to overcome challenges in the future, empower workers, and create opportunities for shared prosperity and inclusive growth.
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