University dropouts versus high school graduates in the school-to-work transition. Who is doing better?

This study considers the enrolment at university and the subsequent possible dropout as a piece of the school-to-work transition and asks whether it improves or worsens the labour market outcomes a few years after graduation from the high school. Design/methodology/approach – The analysis exploits data from the Upper Secondary Graduate survey by ISTAT on a cohort of high school graduates and investigates the effect of dropping out four years after graduation. The labour market outcomes of university dropouts are compared to outcomes of high school graduates who never enrolled at university. A propensity score matching approach is applied. The model is estimated also on the subsamples of males and females. Findings – The findings show that spending a period at university and leaving it before completion makes the transition to work substantially more difficult. Both the probability of being NEET and the probability of getting a bad job increase in case of dropout, while no relevant effect is found on earnings. Moreover, the impact of university dropout tends to be more harmful the longer the spell from enrolment to dropping out. Separate estimates by gender point out that females appear to be relatively more affected in the case of dropping out without a fallback plan. Originality/value – While the existing studies in the literature on the school to work transition mostly focus on the determinants of the dropout, this study investigates whether and how the employment outcomes are affected by dropping out in Italy. Moreover, university dropouts are compared to high school graduates with no university experience, rather than to university graduates. Finally, evidence on the mechanisms driving the effect of dropping out is provided, by considering timing and motivations for dropping out.