School Leaving, Labour Supply and Tertiary Education Choices of Young Adults: An Economic Analysis Utilising the 1977-1995 Christchurch Health and Development Surveys

Utilising evidence from a longitudinal data set of young adults in New Zealand, this study examines the determinants of school leaving and labour supply behaviour of young adults at ages 16 and 18. The data set employed (the Christchurch Health and Development Survey) includes a number of variables, from birth to age 18, not commonly available in economic data sets. The analysis uses binary choice models to examine the effect of ability factors and household economic constraints on the choice to remain at secondary school beyond post-compulsory levels at age 16. The study further uses binary and multinomial choice models to examine the determinants of participation in tertiary education, as opposed to engaging in labour supply, or unemployment at age 18. The study finally examines the determinants of the type of tertiary institution attended. The results show that participation in tertiary education depends on a combination of family resources, ability and prior achievement. Interestingly the results show girls' (but not boys) school leaving at age 16 is positively and significantly associated with the proportion of family income received from benefits, and with the mother's educational qualifications.