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Bumpy Rides: School to Work Transitions in South Africa

  • Pugatch, Todd

    ()

    (Oregon State University)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6305.

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Length: 53 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6305
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  1. David Lam & Cally Ardington & Nicola Branson & Murray Leibbrandt, 2013. "Credit Constraints and the Racial Gap in Post-Secondary Education in South Africa," NBER Working Papers 19607, National Bureau of Economic Research, Inc.
  2. Arcidiacono, Peter, 2004. "Ability sorting and the returns to college major," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 343-375.
  3. Yamauchi, Futoshi, 2005. "Race, equity, and public schools in post-Apartheid South Africa: Equal opportunity for all kids," Economics of Education Review, Elsevier, vol. 24(2), pages 213-233, April.
  4. James J. Heckman & John Eric Humphries & Paul A. LaFontaine & Pedro L. Rodr�guez, 2012. "Taking the Easy Way Out: How the GED Testing Program Induces Students to Drop Out," Journal of Labor Economics, University of Chicago Press, vol. 30(3), pages 495 - 520.
  5. David Lam & Cally Ardington & Murray Leibbrandt, 2007. "Schooling as a Lottery: Racial Differences in School Advancement in Urban South Africa," SALDRU Working Papers 18, Southern Africa Labour and Development Research Unit, University of Cape Town.
  6. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2007. "Why Has Unemployment Risen in the New South Africa," NBER Working Papers 13167, National Bureau of Economic Research, Inc.
  7. Heckman, James J. & Navarro, Salvador, 2005. "Dynamic Discrete Choice and Dynamic Treatment Effects," IZA Discussion Papers 1790, Institute for the Study of Labor (IZA).
  8. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
  9. Pugatch, Todd, 2012. "Bumpy Rides: School to Work Transitions in South Africa," IZA Discussion Papers 6305, Institute for the Study of Labor (IZA).
  10. Christian Belzil & J�rgen Hansen, 2002. "Unobserved Ability and the Return to Schooling," Econometrica, Econometric Society, vol. 70(5), pages 2075-2091, September.
  11. David Lam & Murray Leibbrandt & Cecil Mlatsheni, 2008. "Education and Youth Unemployment in South Africa," SALDRU Working Papers 22, Southern Africa Labour and Development Research Unit, University of Cape Town.
  12. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
  13. James A. Levinsohn & Todd Pugatch, 2011. "Prospective Analysis of a Wage Subsidy for Cape Town Youth," NBER Working Papers 17248, National Bureau of Economic Research, Inc.
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