Higher education demand in Spain: the influence of labour market signals and family background

Abstract

Like many developed countries, Spain has experienced a growth in the demand for higher education over the last twenty years, despite diverse economic cycles. Since this demand does not slow down in the medium term, the objective of this study is to analyse, from statistical labour force sources since 1987, two potential influences: family characteristics and labour market signals. The theoretical framework used here is the human capital theory, which is tested through discrete choice models where the selection process of young people through the education system is considered. The chief results may be summarised as follows: firstly, family characteristics are important elements in the demand for higher education, especially the mother’s education attainment, which is even more determinant than that of the father. Secondly, the labour market signals in Spain have an influence on the demand for higher education: as a signal of both the opportunity cost of finding a job if not going to university and the employment expectations for each relevant education level.