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After finishing compulsory education, young people in England have a range of higher education (HE) and further education (FE) options available to them. While people are familiar with the route taken by most HE learners - completing A Levels and then a degree at university - less is commonly understood about FE at tertiary level. In this note, we address this by describing the educational routes taken by individuals who choose to pursue tertiary-level FE courses. Additionally, we show how learners in different post-18 education routes differ by prior attainment, age and gender. As well as presenting descriptive evidence, we examine the association between different educational pathways and future earnings. Specifically, we present estimates of the early-labour-market returns (at age 26 and age 30) associated with different levels of post-18 qualifications.

We find that, on average, certain FE qualifications, such as Level 4 qualifications for men and Level 5 qualifications for women, are associated with higher average early-labour-market earnings than completing a degree. We find that these patterns hold even once we condition on observable characteristics. Whilst we use the term 'returns', we are careful not to claim that these estimates capture the causal impact of taking these qualifications, as there may be other factors that we do not observe that may potentially account for selection of different individuals into the different routes. This note is structured as follows. We begin by introducing the data and sample used in our study. Next, we present our emerging findings on the different routes taken through post-18 education, as well as the characteristics of learners in different routes. Finally, we investigate earnings outcomes for the different post-18 routes and what happens to those earnings outcomes once we condition on observable characteristics of the people taking them.

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Using rich administrative data for a full cohort of English secondary school leavers (2002/03 academic year), we compare earnings of people with higher vocational/technical qualifications to the earnings of degree holders at the age of 30, while controlling for prior attainment and background characteristics. We find that by the age of 30 the early earnings differential associated with high-level vocational/technical education tends to disappear and degree holders earn more on average. However, there is strong heterogeneity by gender and subject area. There are especially high returns related to higher vocational/technical education in [science, technology, engineering and mathematics] STEM subjects, which remain significantly above those of many degree holders several years after graduation.

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As the UK labour market faces challenges on multiple fronts, the Further Education (FE) sector is identified as a potential source of solutions, alongside Higher Education (HE). FE plays a key role between compulsory level schooling and HE, providing important vocational and technical skills needed of their workers by employers in the labour market, as well as providing a potential route to higher level study for those who have chosen not to go down the academic route, perhaps due to lower attainment in the compulsory phase of education. The aim of this report is to look at previous cohorts of learners, to demonstrate the extent to which the FE sector, and FE Colleges in particular, have been successful in leading to well-paid employment, and facilitating progression to HE.

In addition, the FE sector has a role to play in social mobility. Young people from a more disadvantaged background have been shown to be more likely to undertake further learning in the FE sector, rather than the traditional academic route of A levels and HE, which we provide further evidence for in this report. Whether FE Colleges can boost social mobility therefore depends on whether young people from a more disadvantaged background have better outcomes relative to their more advantaged peers in FE Colleges than in Sixth Form Schools. If this is the case, then FE Colleges, where the disadvantaged are more likely to attend, can play in key role in narrowing differentials across socio-economic backgrounds. Whether this is the case is a key part of the analysis presented here. This report will therefore present various pieces of evidence relating to the relationship between FE participation and outcomes such as access to well-paid employment and HE progression.

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