This paper reviews current knowledge about the impact of vocational education and training on the labour market outcomes for young people in advanced market economies, and asks whether the results can be extrapolated to countries in the Western Balkans and the EU neighbourhood. It draws four main policy conclusions. First, in transition countries, specialised vocational education should not be replaced by streaming or tracking within comprehensive school systems or integrated into general education programmes. Abandoning effective vocational schooling may worsen the labour market outcomes for the less able and disadvantaged young people. Inadequate vocational school systems should be strengthened, while ensuring effective pathways to higher levels of education. Second, while apprenticeship systems enable lower ability students and minorities to access the labour market, they may lock women into traditional female occupations. Well-organised and resourced school-based vocational education may be preferred by women who feel they could benefit from them, and may furthermore reduce school drop-out rates. Third, occupational mobility can be improved by effective school-based vocational education. If returns to such education are sufficiently high, they can incentivise mobility. While for developed economies there is little difference in rates of return between general and vocational education, in transition economies, returns to vocational education are higher than returns to general education. Fourth, while occupational mobility is needed for countries undergoing structural change, it should be noted that too much mobility can also be harmful to the skill retention, especially for women. Special attention should therefore be given to providing complementary opportunities for retraining and for lifelong learning to all workers, but especially to women, to encourage and support the desired degree of mobility in the labour market.
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