Bumpy Rides: School‐to‐work Transitions in South Africa

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Re-enrollment in school following a period of dropout is a common feature of the South African school to work transition that has been largely ignored in both the literature on South Africa and the wider literature on sequential schooling choice. In this paper, I quantify the importance of the option to re-enroll in the school to work transition of South African youth. I estimate a structural model of schooling choice in South Africa using a panel dataset that contains the entire schooling and labor market histories of sampled youth. Estimates of the model's structural parameters confirm the hypothesis that enrollment choices reflect dynamic updating of the relative returns to schooling versus labor market participation. In a policy simulation under which re-enrollment prior to high school completion is completely restricted, the proportion completing at least 12 years of schooling rises 6 percentage points, as youth who would have dropped out under unrestricted re-enrollment reconsider the long-term consequences of doing so. The results suggest that the option to re-enroll is an important component of the incentives South African youth face when making schooling decisions.JEL Classification: I21, J24, O12

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