The returns to completion or partial completion of a qualification in the trades

Many students do not complete full qualifications in the vocational education and training (VET) system because their intention is to obtain only the particular skills they require. This can be achieved through the acquisition of skill sets; these enable flexibility in training to quickly respond to changes in the labour market. Skill sets may also be more appealing to learners due to their relatively lower cost and shorter training duration. Despite the advantages of skill sets, it is clear from previous National Centre for Vocational Education Research (NCVER) research that VET students who complete a full qualification have better labour market outcomes than those who do not. Investigating partial completion allows us to consider the impact that completion of skill sets has on the returns to training.   

Building on the previous research, this particular report focuses on the value of completing a qualification in the trades. Using data from the 2013 Student Outcomes Survey, the research quantifies the benefits of completion of a full qualification relative to partial completion of a qualification. The report also identifies the trade occupations to which completion of a full qualification matters most.

Key messages

• Completion of a full qualification in the trades on average leads to better employment outcomes than completion of modules only. Compared with module completers, graduates are estimated to have a 12% higher chance of being employed after training, a 27% higher chance of having their employment status improved after training, and a 71% higher likelihood of working in jobs that match their training.
• The wage gap between graduates and module completers is relatively small, with graduates estimated to annually earn 2.7% more than module completers.
• The returns to qualification completion vary greatly depending on the trade.
  • The labour market advantages of completion of a full qualification are stronger in the licensed trades than in the non-licensed trades.
  • Completion of a qualification in the electrotechnology and telecommunications trades leads to the highest income return.
  • The construction trades and the electrotechnology and telecommunications trades offer the strongest labour market outcomes to graduates.

Students who intend to study the trades should be encouraged to investigate the various types of trades and weigh up the possibilities and potential benefits to completing a full qualification. These findings emphasise the important role of career guidance for trade students while they are still engaged in the VET system.

Dr Craig Fowler
Managing Director, NCVER

One of the distinctive features of the Australian vocational education and training (VET) system is that many students do not complete qualifications. The commonly held view is that these students are typically not interested in qualifications, but rather complete a module or a set of modules to obtain particular skills and then leave the VET system. Furthermore, the general advances in information technology, the increased complexity of work and the drive for increased productivity demand significant advances in the skills held by workers. A consequence of these imperatives has been the introduction of skill sets, which have been developed by industry skills councils in training packages or developed by registered training organisations through consultation with their clients. While the aim of skill sets in the VET system is to enable a rapid response to the changes in labour market requirements, a common argument is that skill sets may limit individuals to narrow job roles and reduce their labour mobility.

This report seeks to determine the benefits of completing a VET qualification intended to prepare students for working as technicians and trade workers after training, the primary aim being to identify the type of trade¹ where completion of a full qualification matters the most. The trades for which the training is required are examined from the perspective of their licence requirements and their intended occupations, which are classified at the two-digit level of major group 3 of the Australian and New Zealand Standard Classification of Occupations (ANZSCO). The data examined for this study came from the 2013 Student Outcomes Survey, conducted by the National Centre for Vocational Education Research (NCVER).

Completion of a full qualification in the trades on average leads to better labour market outcomes than completion of a module or a set of modules. Individuals with a VET qualification in the trades are predicted to have an 11.8% higher likelihood of being employed after training, a 26.8% higher probability of having their employment status improved after training, and a 71.2% higher chance of working in jobs commensurate with their training than those who completed modules only. The estimated wage gap between graduates and module completers is 2.7%, which indicates that completion of a full qualification in the trades becomes less important when it comes to annual earnings.

While completion of a full qualification matters in the trades on average, the extent of the return from qualification completion varies greatly and depends on the trade area in which students completed their training.

• The construction trades and the electrotechnology and telecommunications trades are the two areas that offer graduates the strongest benefits. In particular, completion of a full qualification in the construction trades results in a 71% likelihood of being employed after training, 60% chance of improving employment status after training, and 67% probability of working in a job that matches the occupation for which the qualification is intended. For completion of a qualification in the electrotechnology and telecommunications trades, it is 59%, 60%, and 64% respectively. Graduates in the electrotechnology and telecommunications trades are predicted to have the highest income returns, followed by graduates in the automotive and engineering trades. 

• The labour market advantages of completion of a qualification are stronger in the licensed trades than qualification completion in the non-licensed trades. Graduates in the licensed trades are predicted to have 56—60% likelihood of being employed after training, or have their employment status improved after training, or work in jobs that match with their training, compared with 41—44% likelihood of graduates in the non-licensed trades. Graduates in the non-licensed trades are predicted to earn approximately $6700 annually less than graduates in the licensed trades after training.

Overall, the main implication of these findings is that completing a qualification in the trades does matter. Students need to be aware that there are different pay-offs from the trades areas they choose to study and from the different reasons for undertaking training (such as whether it is to get a job after training or to earn a higher income or to work in a job that matches with the training). As a result, students who intend to study the trades should be encouraged to undertake training in the areas where the returns from the labour market are greatest. The results therefore emphasise the important role of career guidance for trade students while they are still engaged in the VET system.

¹ Type of trade being the intended occupation or trade area.