International Handbook on the Economics of Education

International Handbook on the Economics of Education

Elgar original reference

Edited by Geraint Johnes and Jill Johnes

This major Handbook comprehensively surveys the rapidly growing field of the economics of education. It is unique in that it comprises original contributions on an exceptional range of topics from a review of human capital, signalling and screening models, to consideration of issues such as educational externalities and economic growth, funding models, determinants of educational success, the educational production function, educational standards and efficiency measurement. Labour market issues such as the market for teachers and the transition of students from school to work are also explored.

Chapter 13: The School-to-Work Transition

Steve Bradley and Anh Ngoc Nguyen

Subjects: economics and finance, economics of education, labour economics, public sector economics, education, economics of education


Steve Bradley and Anh Ngoc Nguyen I Introduction If the early part of an individual’s working life had no negative immediate or long-term consequences, the school-to-work transition would be of little importance.1 Unfortunately this is not the case. The early part of an individual’s career is the optimal time to invest in education and training. In fact, in many countries institutional arrangements are such that entry to vocational training programmes, such as apprenticeships, is restricted to ‘young’ people. Training leads to the acquisition of skills and hence entry to skilled occupations. Similarly those young people who leave school at the minimum age and who do not take up training opportunities are likely to cut themselves off from higher education opportunities which lead to professional and managerial occupations. The consequence is that these young people are likely to enter unskilled ‘dead-end’ occupations in the secondary labour market (Doeringer and Piore, 1971). A lack of training and entry to unskilled occupations is likely to reduce lifetime earnings and increase the risk of experiencing periodic spells of unemployment.2 Indeed it is argued that unemployment has a ‘scarring effect’ and serves to reduce the probability of employment and future earnings and increase the risk of future unemployment (Arulampalam, 2001). A recent study by Omori (1997) reports clear evidence of lagged duration dependence of unemployment for US youths. After controlling for unobserved heterogeneity, he finds that ‘a one-month increase in the duration of past non-employment lengthens the expected duration of future non-employment by 0.39...

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