There is a need to align technical and vocational education and training (TVET) programs with industry demands as latest research shows that a TVET certification does not necessarily mean higher wages for its holder.
A new discussion paper from the Philippine Institute for Development Studies (PIDS) indicates that TVET completion lends no automatic guarantee of higher wages upon hiring. On the contrary, evidence indicates no significant average wage difference between TVET graduates and non-TVET graduates employed in private establishments.
Moreover, other research shows that TVET completion leads to higher wages for those who completed secondary education and below as compared to non-graduates with the same level of education. But it results in a wage disadvantage for TVET graduates if among those with at least post-secondary education, including college undergraduates and graduates.
“Overall, these results imply that TVET completion does not automatically guarantee receiving higher wages, holding other things the same,” the paper said. “This suggests that wage premiums due to TVET completion significantly vary across education levels.”
To address these shortcomings, the PIDS report recommends aligning TVET programs with industry demands and standards by revamping their design, content, and delivery in collaboration with the private sector.
“A shift towards a more demand-driven TVET promises socio-economic benefits at the individual, firm, and economy-wide levels,” it said.
This can be achieved by decentralizing the creation of training programs and the development of industry certification systems to the private sector, said study authors Ian Nicole Generalao, Jennylyn Balaoro, Pauline Lorenzo, and John Rivera.
The PIDS researchers also suggest putting in place financial and non-financial incentives, such as tax incentives, payback clauses, scholarship allocation, and recognition schemes, to increase the involvement of the private sector in training provision.
Industry TVET boards representing firms and enterprises of all sizes and industries can also be formed to operationalize policy measures.
“These [actions] can complement the intended positive effects associated with the full implementation of the Enterprise-Based Education and Training (EBET) Framework Act, which aims to harmonize the enterprise-based training programs and streamline and improve incentive mechanisms for a greater role of the private sector in the TVET system,” said the research paper released last June.
Moreover, the document proposes shifting to training programs that can lead to more productive occupations and sectors.
It pointed out that close to 90% of TVET graduates have completed a TVET program at the more basic levels, which only equips them with manual, practical, and operational knowledge and skills to perform predictable and routine tasks.
Thus, most of them are not knowledgeable and skilled enough to deal with non-routine issues and work tasks involving greater individual responsibility and autonomy.
“TESDA, working closely with the private sector and other stakeholders, should focus on intensifying efforts to develop and offer advanced TVET programs that lead to higher paying jobs in more productive industries,” the publication suggests.
At the same time, it is imperative to effectively implement the Philippine Qualifications Framework (PQF) to de-stigmatize the potential bias against TVET graduates.
“This signals to the labor market, specifically to the employers, the commitment of the national government to ensure that certain levels in the TVET track (e.g., NC I-IV, Diploma) are equivalent to the higher education track (e.g., first, second-year college levels, etc.).”