Explaining the SES School Completion Gap

Abstract

Relatively low rates of school completion among students from low socio-economic (SES) backgrounds is a key transmission mechanism for the persistence of intergenerational inequality. Using a rich dataset that links data from the Programme for International Student Assessment (PISA) with data from the Longitudinal Surveys of Australian Youth (LSAY), [the authors] use a decomposition framework to explain the gap in school completion between low and medium SES and between low and high SES. The two most important factors found to explain the gap are lower educational aspirations of low SES students and their parents (over 30 per cent of the gaps) and lower numeracy and reading test scores at age 15 (over 20 per cent of the gaps). Differences in the characteristics of schools (including resources, governance, teachers and peers) attended by low and higher SES students is estimated to be relatively unimportant, explaining only around six per cent of the gaps.