Linkages between Australian vocational education and training and the labour market

This paper canvasses a range of areas which bear on the linkages between vocational education and training (VET) and the labour market. The first is described as institutional linkages. These are the formal legal and administrative structures that tie together VET and the labour market. The second area is that of general skills development. Australia's general approach is based on the idea that education and training increases an individual's human capital leading to higher wages and better employment outcomes. The final area is labelled the dynamics of the labour market. This is the most complicated and covers things such as occupational mobility, the contrast between occupation-specific and general skills, the way VET changes to reflect changes in the structures of the labour market, and the way individuals choose their training. The paper concludes by arguing that there are three areas to be considered in analysing the links between vocational education and training and the labour market: (1) institutions; (2) general skills development; (3) dynamics of the labour market. In respect of institutions, Australia has a well developed set, but these constantly need to be modified to ensure that they are relevant. In respect of general skills development, the focus is the individuals' human capital, and this is the critical link between VET and the labour market. People get trained and educated to equip themselves better for the labour market, and this goes much wider than specific training for specific jobs. Finally, the dynamic nature of the labour market, both in terms of labour mobility at a point in time and structural change occurring over longer periods, implies that the VET system has to be flexible and responsive. This is a world of many players and constant change; it is not a world of targets and getting it right. Show less