Study or Work? The Impact of Social Background and Unemployment Rates on the Decision of Vocational High School Graduates in Austria

Vocational high schools (BHS) constitute a popular school type in Austria and are particularly appealing to students from lower socio‐economic backgrounds. These five‐year schools provide an alternative pathway to a general higher education entrance qualification, combining academic schooling with the “safety net” of school‐based vocational training. Although BHS represent an important route into higher education, with approximately half of graduates entering higher education within three years, the other half do not, with many opting to enter the labour market directly. Drawing on rational action theory, this study examines the relationship between students’ social backgrounds (measured by parental education level), labour market prospects following graduation from BHS, and higher education enrolment. We analyse the further educational and labour market pathways of the entire 2016/17 cohort of Austrian BHS graduates, using unique data that combines several high‐quality administrative registers. Descriptive analysis shows that transition rates to higher education vary considerably according to parental education. We employ logistic regression models to demonstrate that higher regional unemployment rates for the particular vocational qualification of BHS are associated with increased transition rates to higher education. In contrast with the assumptions of the “diversion thesis,” findings indicate that this effect does not vary according to the education of students’ parents. Consequently, BHS graduates with lower levels of parental education are equally likely to be deterred from pursuing higher education by the prospect of employment as those with higher parental education.