March 2014

IZA DP No. 8015: Do Tertiary Dropout Students Really Not Succeed in European Labour Markets?

revised version published as 'How do Tertiary Dropouts fare in the Labour Market? A Comparison between EU countries' in: Higher Education Quarterly, 2017, 1, 75-96

Tertiary education has been expanding hugely over the last decades, so that tertiary dropout students will constitute a growing distinctive group in future labour markets. University dropout is regularly discussed as a ‘negative’ indicator. However, research on actual career trajectory of dropout students is virtually non-existent. Using data from the 2011 Programme for the International Assessment of Adult Competencies (PIAAC) this study first compares the percentage of adults with tertiary dropout experience between European countries. Second, we examine whether tertiary dropout is a permanent decision as a considerable part of the literature assumes. In a third step, we investigate characteristics of adults with dropout experience. Finally, we estimate the ‘effect’ of dropout on employment status and success of entering prestigious professions comparing results of logistic regression analysis and propensity score matching taking individuals’ characteristics like socio-economic and demographic background, work experience and cognitive skills into account. Results indicate that conditional on these characteristics and for all countries examined on average those individuals who attended but dropped out of tertiary education fare often better and never worse in terms of career progression than those who never enrolled. These to the knowledge of the author first cross national results on tertiary dropouts’ career progression therefore question the purely negative view of tertiary dropout predominant in the literature and at universities.