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LSC South East - lsc.gov.uk - Learning and Skills Council

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2. Literature Review<br />

There is a large body of UK empirical research that examines the factors that<br />

influence the decision to participate in post-compulsory education between the<br />

ages of 16-18. Most of these studies, often carried out by educationalists,<br />

psychologists <strong>and</strong> economists, using different data <strong>and</strong> methodologies, find some<br />

agreement on the factors that influence this decision (Appendix A1 provides the list<br />

of references to the studies reported in this section. Appendix A2 provides a<br />

summary of data <strong>and</strong> methodologies used in selected studies reviewed below). It<br />

is important to note that there is almost universal agreement in the studies<br />

reviewed here, inter alia, that educational attainment at 16, measured by either O<br />

level or GCSE grades, provide an important indicator of an individual’s academic<br />

skills <strong>and</strong> aptitude for post-compulsory education <strong>and</strong> is found to be a significant<br />

determinant of participation rates. For ease of exposition we review the literature<br />

under four headings that convey the general influences on the decision to<br />

participate in post-compulsory education commonly found. These are: expected<br />

future earnings, family background characteristics, school effects, <strong>and</strong> the effect of<br />

<strong>gov</strong>ernment policy changes.<br />

2.1 Expected Future Earnings<br />

The theory of human capital is often used as a framework of analysis in many<br />

empirical studies (see Becker, 1993). Post-compulsory education is assumed to<br />

be an investment good <strong>and</strong> the returns to such investment, as measured by the<br />

future or lifetime discounted earnings stream associated with post-compulsory<br />

qualifications, is assumed, a priori, to be an important determinant of participation<br />

in education beyond the school leaving age. Researchers using labour market<br />

information from a variety of data sources (see Appendix A2), have constructed<br />

variables that proxy pupils’ expected lifetime earnings streams. These include: the<br />

future discounted earnings associated with graduate study; the future discounted<br />

earnings associated with different occupations; <strong>and</strong> the future discounted earnings<br />

received by different ethnic groups (see, for example, Leslie <strong>and</strong> Drinkwater, 1991;<br />

Andrews <strong>and</strong> Bradley, 1997; Rice, 1999). The results from this literature support the<br />

view that a pupil’s expected future earnings are significant in determining the<br />

decision to participate in post-compulsory education. Against this, studies using<br />

time series data over various periods since the 1950s, have suggested that higher<br />

levels of present <strong>and</strong> future youth <strong>and</strong> adult unemployment are associated with<br />

greater uncertainty regarding future earning streams <strong>and</strong> thereby discourage<br />

participation (see, for example, Pissarides, 1981; Whitfield <strong>and</strong> Wilson 1991; Rice,<br />

1999; McVicar <strong>and</strong> Rice, 2001; Clark, 2002). However, Micklewright et al (1988)<br />

found no evidence of an association between participation rates <strong>and</strong><br />

unemployment in the period 1974-78.<br />

2.2 Family Background Characteristics<br />

A consistent finding in cross-sectional studies is that the parental <strong>and</strong> socioeconomic<br />

background of a student has an important effect on the probability of<br />

participating in post-compulsory education. Such influences can be transmitted<br />

through parents’ ability to finance, encourage, <strong>and</strong> support their children in further<br />

5

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