*3.3. Changing Structures and Financing of Short-Cycle and Institutionalized Vocational and Tertiary Education*

After a brief decline, public investment in tertiary education as a percent of government expenditure on education increased as a priority in less-developed countries. At the same time, it was unstable in developed countries (Figure 5). Before 2016, developed countries spent a substantially higher percentage of total government expenditure on tertiary education than less-developed countries. The less-developed nations made a substantial new investment in tertiary education after 2007, especially after 2018, when it appeared nearly equal to the investment by developed nations (Figure 5). This increased spending on tertiary education in less-developed countries could be an artifact of four-year tertiary institutions taking on a more substantial role in technical and vocational education, similar to the changes in European higher education discussed in Section 2 above.

**Figure 5.** Government Expenditure on Tertiary Education as Percent of Government Expenditure on Education by countries' development status.

Except for 2000, a year outside the trend, the less-developed nations invested a substantially lower share of expenditure on secondary education per student than developed nations. After constrained expenditure on secondary education during 2000–2005, developed countries increased the percentage of government expenditure on secondary education per student between 2006 and 2011; spending declined to the level of the early 2000s

(Figure 6) in terms of public spending on secondary education across these less-developed nations over this period. In 2000, less-developed nations spent a higher percentage than the developed nations in this study. After a drop in 2002, this percentage rose again in less-developed nations after 2008.

**Figure 6.** Public Expenditure per Secondary School Student as Percent of GDP Per Capita by countries' development status.

Enrollment in vocational secondary school dropped substantially in the less-developed nations after 2000. the developed EU nations continued the VET approach, and the share of VET secondary enrollment was stable at around 25% (Figure 7). The longitudinal trend in the developed nations, primarily European, illustrates a link with regional cooperation on production, trade, and workforce migration. The VET high school courses in EU countries and New Zealand aligned with collegiate opportunities at the bachelor's level, since all of these nations had upgraded collegiate technical education and aligned it with employment. The open-market approach enabled governments to continue production as part of within-EU trade.

**Figure 7.** Tertiary Technical/Vocational Enrollment as Percent of Total Secondary Enrollment by countries' development status.

Between 2000 and 2018, VET enrollment in less-developed nations declined from approximately 19% of high school students to 1% in 2006 and did not change substantially after that. This decline may be partially due to secondary school students preferring academic secondary school curricula. Such a substantial decrease must be due to policy changes in less-developed countries over the past two decades [13].

The shift away from vocational education enrollment in high schools has been crossnational. It is evident in developed and less-developed nations [89]—a structural change only partially influenced by the US STEM narrative. The rise in international testing and other changes promoted by OECD created new patterns of educational development and funding [90]. High-poverty countries have faced challenges, including AIDS and COVID-19, that shut down large portions of secondary enrollment [91]. They too often lack the resources to adapt quickly—home computers are essential for distance schooling, and accessible health care is necessary to prevent the spread of diseases. The education structure has been changing in the twenty-first century, and many of the highest-need nations cannot adapt when necessary.

Vocational programs are more expensive than general education, which adds nuance to interpreting these trends. Governments may be unable or unwilling to fund more costly VET secondary programs. However, moving VET into four-year degree programs provides an alternative. The EU maintained social responsibility in education and public finance policies, a value implicit in this shift in the locus of technical education. In contrast, the US STEM strategy seemed to be a cost-cutting move for federal government [22]. Social responsibility for the uplift of working-class families is especially critical in the US, where benign neglect of funding for vocational programs has influenced the decline of the middle class at a higher rate than in the EU [27]. While important, these issues remain speculative because they are beyond the scope of these analyses.

### *3.4. Comparing VET in Developed and Less-Developed Nations*

As the final step in the longitudinal trend analysis, we reflect on patterns of policy development (Section 2). The EU approach to secondary and postsecondary development, the Washington Consensus, and the early British Commonwealth approach to institutional development have influenced developmental patterns.

Understanding the history of policy and planning within national and regional systems helps build an understanding of the evolution of institutional forms. The EU and ASEAN nations evolved regional strategies that helped resist some troubling effects, such as privatization and inequity in education, observed in early critiques of globalization [92] and marketization [93]. Recent developments suggest a change in the global trajectory.

Within regional supply chains, Europe and Southeast Asia avoided economic problems evident in the US economy associated with the decline in China's manufacturing activity during shutdowns in the COVID-19 crisis [85]. The EU and ASEAN countries have more extensive regional trade, which probably eased challenges created by COVID-19. These regional supply chains are closer than the US and China. Furthermore, China went through more severe shutdowns in industrial production than ASEAN and EU nations. The Washington Consensus influenced the patterns of institutional development on privatization in the 1990s; however, many Asian and Latin American countries are pondering the legacy of college debt in still-developing nations [12,94,95]. The British Commonwealth's development converged with strategic planning for technical development in ASEAN countries, contributing to the high-tech supply chain.

As noted above, changes in development in the past decade further inform the argument that the global trajectory has changed. The trends suggest that European trade benefited from tensions between the US and China. The tension about trade between China and the US began before Trump ran for President [96]. Changes in trade started before the election—Trump voiced the festering problem. There were also changes in the relationships among less-developed countries, Europe, and China as the EU nations took on more production. At the same time, less-developed nations in Africa and Latin America

began questioning the rapidly changing northern hemisphere theories of development promoted by UN organizations and the World Bank.

In the late 20th century, the World Bank and other international organizations aligned their guidance and financial support with the Washington Consensus that argued for privatization, using tuition fees and loans to pay for postsecondary education. As economic globalization progressed, however, these same organizations promoted VET to engage rapidly in many developing nations as they played increasingly substantial roles in the global economy. The shift was often motivated by assessments in less-developed countries that refocused on sustainability for their populations. Increasingly, it may be appropriate to view public spending on short-cycle VET as a step toward new industrial development that four-year technical programs may replace if economic development is successful. This idea fits patterns in the EU and may apply in some less-developed nations as they move forward in an increasingly politicized global economy.

It is evident from the longitudinal trend analysis and review of policy development that there is no longer a single narrative guiding international economic development. The EU, the UK, and ASEAN nations developed vocational bachelor's programs. Students and graduates in Latin America and Southeast Asia have educational debt that could constrain domestic economic development for another generation. The EU and ASEAN models show that national and regional interests support cooperative action in education and trade. These nations have been better prepared to adapt to the recent and rapid shifts in global patterns of economic development.

There is a relatively long history that includes European technical institutes, polytechnics in England, and engineering and specialized undergraduate colleges in the USA and other nations. Some US land-grant universities, such as Ohio State and Purdue, have two-year campuses with transferrable technical programs. In addition, graduate schools routinely offer short-cycle courses through continuing education to update professionals as technologies change. Private corporations also develop short-cycle programs to update practicing professionals and technicians with new technologies, especially in software and web-based applications. Integrating new content into academic programs for undergraduate and graduate students is the second step in adaptive change supporting local economic development. This two-step process makes sense and fits with the findings of the trend analysis, informed by the historical analysis in Section 2.

## **4. Fixed-Effects Study of Public Investment in Short-Cycle Postsecondary Education**

Most of the literature examined above provides qualitative country/regional analysis and uses descriptive quantitative methods (e.g., using trends and mean) to study access to tertiary vocational education. None of these studies have provided empirical evidence on whether education finance policies have influenced the development of tertiary vocational education across different countries. The fixed-effects regression analysis of public investment reported here adds to the literature on public investment in short-cycle tertiary education. We discuss the methods and findings below.

#### *4.1. Methods*

This fixed-effects regression uses 19 years of data from nations reporting to the World Bank. The analyses provide insights into how the global economy and public investment have influenced tertiary vocational education. After accounting for missing data, the sample size of the final dataset is 681 (an unbalanced panel dataset with varying numbers of years for each country). We discuss the variables, statistical models, and data limitations below.
