The impact of vocational skills training on earnings: Evidence from China

Vocational skills training (VST) is essential for boosting productivity and economic growth, particularly in the digital era where rapid technological change continuously reshapes skill demands. The association between training and economic outcomes has been extensively debated in previous literature; however, empirical findings on the causal relationship between training participation and earnings remain scarce, particularly for government-supported training programs. This study examines the impact of VST on earnings using instrumental variable estimation with data from Shandong Province, China. The findings demonstrate that VST participation generates substantial earnings returns average 12.1%, with male and female participants experiencing gains of 17.2% and 9.6%, respectively. Furthermore, training intensity exhibits significant earnings effects across program types and training categories. Specifically, each additional program type increases earnings by 13.2%, while each additional training category increases earnings by 11.5%. Moreover, conditional quantile regression incorporating a control function approach reveals a U-shaped pattern of training effects across the earnings distribution. That is, the largest earnings impacts are observed at the lower and upper percentiles. In addition, mediation analysis identifies that skill enhancement and vocational certification play important roles in transmitting training effects to earnings. This study contributes to the limited evidence on vocational training effectiveness in developing economies by providing rigorous empirical findings that inform more efficient and strategically targeted human capital policies.

Authors

Institutions

Publication Details

Journal
International Review of Economics & Finance
Published
2026-03-04
DOI
https://doi.org/10.1016/j.iref.2026.105079
Primary Topic
Labor market dynamics and wage inequality
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

The impact of vocational skills training on earnings: Evidence from China

Hongye Sun
International Review of Economics & Finance
Labor market dynamics and wage inequality
article

The impact of vocational skills training on earnings: Evidence from China

Hongye Sun
article en

Abstract

Vocational skills training (VST) is essential for boosting productivity and economic growth, particularly in the digital era where rapid technological change continuously reshapes skill demands. The association between training and economic outcomes has been extensively debated in previous literature; however, empirical findings on the causal relationship between training participation and earnings remain scarce, particularly for government-supported training programs. This study examines the impact of VST on earnings using instrumental variable estimation with data from Shandong Province, China. The findings demonstrate that VST participation generates substantial earnings returns average 12.1%, with male and female participants experiencing gains of 17.2% and 9.6%, respectively. Furthermore, training intensity exhibits significant earnings effects across program types and training categories. Specifically, each additional program type increases earnings by 13.2%, while each additional training category increases earnings by 11.5%. Moreover, conditional quantile regression incorporating a control function approach reveals a U-shaped pattern of training effects across the earnings distribution. That is, the largest earnings impacts are observed at the lower and upper percentiles. In addition, mediation analysis identifies that skill enhancement and vocational certification play important roles in transmitting training effects to earnings. This study contributes to the limited evidence on vocational training effectiveness in developing economies by providing rigorous empirical findings that inform more efficient and strategically targeted human capital policies.

International Review of Economics & FinanceVol. 107
University of Jinan (CN)
Decent work and economic growth
Openalex Percentile: Top 39%
Labor market dynamics and wage inequality
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.