Bumpy Rides: School to Work Transitions in South Africa

Todd Pugatch

No 6305, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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.

Keywords: human capital investment; labor supply; youth unemployment; dynamic discrete choice; South Africa (search for similar items in EconPapers)
JEL-codes: I21 J24 O12 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2012-01
New Economics Papers: this item is included in nep-afr, nep-dev, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published - published in: Labour, 2018, 32(2): 205-242.

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