Labor Market outcome for Vocational Training in India- Does Safety net Theory holds true

Abstract

This work is an attempt to explore and examine why people join Vocational Education and Training (VET) by looking at the labour market outcome for VET trained people. Emerging literature on the performance of VET in European countries encompasses a plausible incentive structure for people to join VET. Essentially people join VET to ensure a better prospect of employment over unemployment. At the same time a decent wage which might not be as high as that corresponds to higher general education but is higher than lower level of general education. Thus choice of VET is trade-off between low risk low payoffs vis-à-vis high risk high payoffs. We observe that whereas contribution of formal VET in Indian context toward wage is insignificant – a large proportion of formal VET trained manpower remains unemployed. We have tried to explore reasons for this peculiar labour market outcome in India.