Social and private costs of school drop-out

Abstract

The high rates of school drop-out registered in Latin America indicate the need to establish new curricula and allocate more resources to the urgent need to keep children and adolescents in the educational system. There are few areas where the resources invested give a higher rate of social and private return. Estimates based on the return to extra years of schooling in urban labour markets indicate that in countries where school drop-out takes place at an early stage, an increase in school retention up to completion of the primary cycle (four more years' schooling) would give between 25% and 60% higher labour income. In countries where school drop-out tends to coincide with completion of the primary cycle, three more years' schooling (up to completion of the first secondary cycle) would lead to wages that were between 30% and 50% higher. Even in countries which have attained a relatively high level of full secondary educational coverage, withdrawal before completion of that cycle entails serious private and social losses: leaving secondary school two years before completing the cycle involves income losses of between 20% and 30%. In a number of countries, the greater return per extra year of secondary education obtained by girls compared with boys indicates that the reduction of school drop-out in these cases helps to reduce the wage gap between the sexes.