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The impact of local labour market conditions on school leaving decisions

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  • Tumino, Alberto
  • P. Taylor, Mark

Abstract

We use data from the British Household Panel Survey and Labour Force Survey to analyse the relationship between the demand for post compulsory education and prevailing labour market conditions in Britain. We explicitly incorporate the role of family resources by allowing effects to differ between young people whose families are home owners and those whose families are tenants. We find evidence that local labour markets significantly influence school leaving decisions of 16 year olds living in tenant households, specifically in social housing. For these groups, an increase in the local youth unemployment rates positively affects school enrolment – consistent with opportunity cost arguments – while high levels of adult unemployment discourage it. Labour markets do not significantly affect school leaving decisions of students from better off families. Our results suggest that factors associated with the family socio economic status, such us parental tastes for education and social norms, outweigh economic considerations among students from higher socio economic backgrounds, who tend to enrol in higher education irrespectively of labour markets conditions.

Suggested Citation

  • Tumino, Alberto & P. Taylor, Mark, 2015. "The impact of local labour market conditions on school leaving decisions," ISER Working Paper Series 2015-14, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2015-14
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    Cited by:

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    2. Aart Gerritsen & Bas Jacobs, 2020. "Is a Minimum Wage an Appropriate Instrument for Redistribution?," Economica, London School of Economics and Political Science, vol. 87(347), pages 611-637, July.
    3. Bradley, Steve & Migali, Giuseppe, 2019. "The effects of the 2006 tuition fee reform and the Great Recession on university student dropout behaviour in the UK," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 331-356.
    4. Emilia Del Bono & Greta Morando, 2022. "For some, luck matters more: the impact of the great recession on the early careers of graduates from different socio-economic backgrounds [Cashier or consultant? Entry labor market conditions, fie," Oxford Economic Papers, Oxford University Press, vol. 74(3), pages 869-893.
    5. Alberto Tumino, 2013. "The effect of local labour market conditions on educational choices: a cross country comparison," ImPRovE Working Papers 13/06, Herman Deleeck Centre for Social Policy, University of Antwerp.
    6. Sara Ayllón & Natalia Nollenberger, 2021. "The Unequal Opportunity For Skills Acquisition During The Great Recession In Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 289-316, June.
    7. Jake Anders & Andy Dickerson & Paul Gregg & Lindsey Macmillan, 2020. "Unemployment: The Coming Storm, Who Gets Hit, Who Gets Hurt, and Policy Remedies," CEPEO Working Paper Series 20-12, UCL Centre for Education Policy and Equalising Opportunities, revised Jul 2020.
    8. Costas-Fernández, Julián & Morando, Greta & Holford, Angus, 2023. "The effect of foreign students in higher education on native students’ outcomes," European Economic Review, Elsevier, vol. 160(C).
    9. P. Taylor, Mark, 2013. "The labour market impacts of leaving education when unemployment is high: evidence from Britain," ISER Working Paper Series 2013-12, Institute for Social and Economic Research.
    10. Del Bono, Emilia & Morando, Greta, 2021. "For Some, Luck Matters More: The Impact of the Great Recession on the Early Careers of Graduates from Different Socio-Economic Backgrounds," IZA Discussion Papers 14540, Institute of Labor Economics (IZA).
    11. Jake Anders & Lindsey Macmillan, 2020. "The unequal scarring effects of a recession on young people's life chances," CEPEO Briefing Note Series 6, UCL Centre for Education Policy and Equalising Opportunities, revised Jun 2020.

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