Abstract
This study examines recent trends and factors in school dropout at the upper secondary education level across Latin America. The methodology employs repeated cross sections of data to track the life cycle path of cohorts of individuals in 18 countries. A key finding is that while upper secondary enrollment rates increased in the region, dropout has remained persistently high, despite relatively favorable macroeconomic conditions. To explain dropout trends, the study examines the impact of three groups of factors: (i) shifts in the cohort size and socioeconomic composition of the population eligible for entering upper secondary; (b) the macroeconomic environment and labor market opportunities; and (c) the returns to schooling. We show that an important factor in persistently high dropout rates has been the higher numbers of students from poor socioeconomic backgrounds reaching upper secondary. In addition, high returns to education have been a pull factor into schooling, while, especially in countries where the majority of youth dropout prior to upper secondary, the data confirm an apparent substitution effect due to the opportunity cost of forgoing employment opportunities. The findings confirm the growing policy focus on upper secondary across Latin America and suggest implications for the policy agenda.
Highlights
Across Latin America (LA), the greatest dropout rates in education systems occur at Upper Secondary Education (USE)
The coefficients for these variables are negative and statistically significant for countries with early dropout, which suggests for this category—which mostly includes low income countries with the exception of Colombia—substitution effects related to the opportunity cost of attending school can supersede the size of the income effects of the incentives provided by the labor market for remaining in school
In spite of increasing overall school enrollment rates across the region and a more favorable macroeconomic and labor market environment during the 21st century, dropout rates at USE ages have remained at high levels after about 20 years, but have even increased markedly in several countries
Summary
Across Latin America (LA), the greatest dropout rates in education systems occur at Upper Secondary Education (USE). We explore the influence of three potential explanatory factors for the region’s persistently high USE dropout rates: i) the socioeconomic composition of the population eligible for entering USE, ii) the macroeconomic environment, employment opportunities for youth entering working age, and iii) returns to schooling (which reflect the labor market’s value of different education levels and are a proxy for education relevance). The methodological approach used is to construct a synthetic panel from 234 cross sections of household survey data, from which we follow schooling trajectories of different generations of individuals observed at different points in time. These trajectories are related to the conditions characterizing the environment during the time when school enrollment decisions were being taken.
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