‘Career education that works: an economic analysis using the British Cohort Study’

By Elnaz T. Kashefpakdel (Senior Researcher, Education and Employers) & Christian Percy (An Independent Academic and Econometrician)

In Journal of Education and Work, 2016. Access the article here.

Read a PDF of the article here: Career education that works an economic analysis using the British Cohort Study.compressed

In this article, the authors examine the relationship between career talks that British teenagers were exposed to at the ages of 14-15 and 15-16 and their later earnings at age 26.  Careers guidance and education has gathered specific interest within recent policy initiatives. Nationally, the UK’s Department for Education has produced careers guidance stating the need for student learning of the world of work. Internationally, the Organisation for Economic Cooperation and Development (OECD) has reported the benefits associated with employer involvement in education.

Despite such notable policy focus on the delivery of careers guidance and education within schools, research on its impact has been limited. This article builds upon the work of Mann and Percy (2014), which surveyed 1,000 young adults aged 19-24 recalling their school days and found a significant wage premium linked to the degree of exposure young people had with school-mediated employer engagement activities. Kashefpakdel and Percy look for evidence of similar relationships, focusing specifically on career talks with people from outside school and by conducting longitudinal analysis.

The study uses the British Cohort Study (BCS70) for its analysis, the only birth cohort with relevant variables.  The cohort study follows people from birth through their lives into adulthood, tracking some 17,000 individuals. It provides a rich and reliable set of measurements including socio-economic factors which could potentially affect income, i.e. parental social class, academic ability, home learning environment and demographics. Through statistical analysis, it is possible to take account of such factors in assessing the impact of specific interventions in determining economic outcomes.

Analysis of this data set was of particular interest in relation to careers education and guidance. Participants in the BSC70 were teenagers in the mid-1980s, at which point the Technical and Vocational Education Initiative (TVEI) was being rolled out across the UK. The Initiative aimed to help prepare young people for entry into the labour market and served to drive greater activity within schools. With the Initiative being rolled out at local authority and school level through the mid-1980s, at the point in 1986 when BCS questioned teenagers, practice around careers and employer engagement varied significantly.

Statistical analysis was used on the data to test the hypothesis that each additional careers talk students encountered would be associated with higher wages at age 26. Within this specific study, only those who reported full-time employment status, as adults, were included in the analysis, as these respondents were deemed to have fully transitioned into the labour market (while those in part-time employment may still be transitioning from education to work).

Results revealed that, on average, for each career talk with someone from outside of the school experienced at age 14-15 young people benefited from a 0.8% wage premium when they were 26. These findings are statistically significant at 5%, meaning that there is a 95% certainty this correlation did not occur by chance. This relationship was not found for those aged 15-16, which implies that career talks had a greater value for the younger cohort.

Analysis also found a statistically significant relationship between student perceptions of the career talks that they experienced and later earnings. Students who found career talks to be ‘very helpful’ at age 14-15 were compared with those who found careers talks ‘not at all helpful/not very helpful’. Findings demonstrated that for students aged 14-15 who found career talks ‘very helpful’ witnessed a 1.6% increase in earnings per career talk they attended. This also proved significant for young people aged 15-16; with a smaller affect size, they benefited from a 0.9% earnings boost. Furthermore, students who deemed talks to be ‘very helpful’ had on average experienced more career talks (typically 3.4) in comparison to young people who found career talks unhelpful (typically 2.2).

The results demonstrate a clear association between the number of career talks attended by young people and their relative earnings at age 26. Findings revealed that the impact of careers talks were more pronounced for the younger age group, 14-15, than they were for the elder group, 15-16. The authors argue that at the older age group may be more focused on examinations, while the younger group were more likely to be receptive to career talks due to the year group being more of an explorative period.

Findings reported here are similar to others working in this field. The authors hypothesise that it is difficult to gain new knowledge and skills, known as human capital, through short duration episodes of engagement with the labour market. However, they could gain access to new, useful and trusted information and networks while interacting with professionals. It is in this realm of social and cultural capital accumulation that enables young people to gain resources of meaning from the activities. Additionally, the findings are in line with the argument that through the repeated encounters with people from outside schools, young people are able to find helpful information about pathways to their career ambitions.  The authors are aware of the caveats in the data. They suggest using a more contemporary data set to validate the relationships observed within the current educational and economic environment. In addition, a further analysis using earnings at a later age, when respondents are considered to be more established in the labour market, would test whether the relationship continues through their lifespan. The role of educational institutions the young people attended was not included in the analysis due to the limitations of the data set, but could potentially provide useful insights for comparison between different school types. Other measures of employment success, besides earnings, could be examined in the future (e.g. job satisfaction).

Read a PDF of the article here: Career education that works an economic analysis using the British Cohort Study.compressed