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The Impact of Gaining an NVQ Level 2: Will the Leitch Review Recommendations Address the Low Returns?

The UK government has identified productivity and skills as key drivers of social inclusion and economic growth. Recent policy initiatives, such as Level 2 Entitlement and Train to Gain, have focused on funding and supporting qualifications at Level 2, although this may change following the Leitch Review, which recommended shifting the focus of intermediate skills to Level 3. This study examines the factors that determine income, and assesses the impact of gaining an NVQ Level 2 on the labour market position of individuals. Data from two waves of the British Household Panel Survey are analysed. The study concludes that there is no significant net benefit from gaining an NVQ Level 2. Achievement of the qualification has a slightly positive but statistically insignificant effect on earnings and on whether or not an individual is a manager. Factors such as gender and qualifications at a higher level than NVQ 2, better explain what determines an individual's income. These findings are considered in light of the Leitch Review.