Stratified or comprehensive? The economic efficiency of school design

We study the efficiency of secondary school design by focusing on the degree of differentiation between vocational and general education. Using a simple model of endogenons job composition, we analyze the interaction between relative demand and relative supply of skills and characterize efficient school design when the government runs schools and cares about total net output. We show; that neither a comprehensive nor a stratified system unambiguously dominates the other system in terms of efficiency for all possibile values of underlying parameters. Since comprehensive systems generate more equal labour market outcomes, it follows that the relationship between efficiency and equity in secondary education is not necessarily a trade off.