The School Leaving Decision at 16

Abstract

The interest of the economist in the youth labour market is a fairly recent phenomena when compared with that of the educationalist, sociologist and occupational psychologist whose interest stretches back over three decades. The economists’ interest stems from the dramatic increase in youth unemployment rates which have emerged over the past decade and the effects that novel methods introduced by Governments in an attempt to alleviate the problems associated with youth unemployment have had on the operation of the labour market. There is one area of youth market behaviour that the economist has tended to neglect—the labour market participation decision at 16 (the school leaving decision)—and has tended to concentrate attention upon other issues. When labour force participation decisions have been considered by economists they have tended to focus on other groups within the labour market. This paper attempts to rectify this imbalance. A model is developed from a consideration of labour supply theory, human capital theory and education literature's treatment of the subject. In addition to identifying factors to explain the school leaving decision of early leavers the relative merits of the added/discouraged worker hypothesis and the explanatory powers of economic vs. ‘social’ variables are discussed.