Vocational education and training in India: a labour market perspective

Skill development has been a major policy agenda in several countries and there is a lot of emphasis on the promotion of vocational education and training (VET) programmes. This paper investigates the labour market outcomes of the vocationally trained population in India using the data from a nationally representative survey on employment and unemployment. We find that a large section of the population in the age group 15–59 years does not have any kind of formal training. Among the VET holders, a large share is accounted for by non-formal trainees. Quite a high proportion of formal trainees in the workforce remain unemployed reflecting underutilisation of human resource. We also examine the extent to which individuals’ training matches their occupational levels and find that overall about two-thirds of the trainees are employed in occupations related to the field of training. Further, we compare the returns to general secondary and vocational education streams using the standard earnings function accounting for the sample selection bias. Our findings show that the relative returns to vocational education is higher than that to general secondary education.