Better Late than Never? How Late Completion Affects the Early Careers of Dropouts

41 Pages Posted: 4 Sep 2019

See all articles by Karsten Albaek

Karsten Albaek

University of Copenhagen - Department of Economics

Rita Asplund

ETLA, Research Institute of the Finnish Economy

Erling Barth

Institute for Social Research, Norway; Department of Economics, University of Oslo; IZA Institute of Labor Economics

Lena Lindahl

Stockholm University - Swedish Institute for Social Research (SOFI)

Marte Strøm

Institute for Social Research, Norway

Pekka Vanhala

ETLA, Research Institute of the Finnish Economy

Abstract

Across the OECD countries, dropouts from upper secondary schooling fare worse in the labor market, with higher NEET rates more spells of unemployment and lower earnings. Among the dropouts, there are however significant shares who complete at a later age. In this paper, we thus ask the question: Does it pay for young adults who do not complete upper secondary schooling by the age of 21, to do so at some point during the subsequent 7 years, that is, before turning 28? In all four Nordic countries under scrutiny, we find that late completion lowers the probability of being outside employment, education or training (NEET) at age 28. Moreover, the exact age of completion does not seem to matter. Our estimates are robust to the inclusion of extensive controls for socioeconomic background and early schooling paths, and similar to the ones produced by event history analysis with individual fixed effects. This indicates that late completion of upper secondary schooling plays an important role for the labor market inclusion of young dropouts.

Keywords: upper secondary schooling, dropouts, NEET rates

JEL Classification: I21, J24, J64

Suggested Citation

Albaek, Karsten and Asplund, Rita and Barth, Erling and Lindahl, Lena and Strøm, Marte and Vanhala, Pekka, Better Late than Never? How Late Completion Affects the Early Careers of Dropouts. IZA Discussion Paper No. 12560, Available at SSRN: https://ssrn.com/abstract=3445826

Karsten Albaek (Contact Author)

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Rita Asplund

ETLA, Research Institute of the Finnish Economy ( email )

Lonnrotink. 4 B
FIN-00120 Helsinki, 00120
United States

Erling Barth

Institute for Social Research, Norway ( email )

Munthesgate 31
0260 Oslo
Norway

Department of Economics, University of Oslo ( email )

PO Box 6706 St Olavs plass
Oslo, N-0317
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Lena Lindahl

Stockholm University - Swedish Institute for Social Research (SOFI) ( email )

Kyrkgatan 43B
SE-106 91 Stockholm
Sweden

Marte Strøm

Institute for Social Research, Norway ( email )

Munthesgate 31
0260 Oslo
Norway

Pekka Vanhala

ETLA, Research Institute of the Finnish Economy ( email )

Lonnrotink. 4 B
FIN-00120 Helsinki, 00120
United States

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