Nonstandard Educational Careers and Inequality

Individuals from low-income backgrounds perform worse than their higher income peers in school. If individuals from low-income backgrounds enter university, they are more likely to do so after dropping out of high school or finishing vocational training. I refer to trajectories that involve vocational training or high school dropout before entering university as alternative paths to university. This paper asks whether alternative paths to university promote social mobility. To reach this goal, I specify a dynamic model of education that follows individuals from low-income backgrounds in the Netherlands during adolescence and early adulthood. The model shows that despite initial achievement gaps, many individuals from low-income backgrounds have high returns from finishing a bachelor’s degree later. They face substantial dropout risk, however, when entering higher education. Alternative paths to university substantially increase university graduation rates and wages among individuals from low-income backgrounds. The main explanation for this result is that many individuals from low-income backgrounds face substantial uncertainty when deciding about their future education at sixteen. Imposing flexibility between different educational careers consequently improves outcomes significantly.