Dropout trends and educational reforms: The role of the LOGSE in Spain

Felgueroso, Florentino; Gutiérrez-Domènech, Maria; Jiménez-Martín, Sergi Article Dropout trends and educational reforms: The role of the LOGSE in Spain IZA Journal of Labor Policy Provided in Cooperation with: IZA – Institute of Labor Economics Suggested Citation: Felgueroso, Florentino; Gutiérrez-Domènech, Maria; Jiménez-Martín, Sergi (2014) : Dropout trends and educational reforms: The role of the LOGSE in Spain, IZA Journal of Labor Policy, ISSN 2193-9004, Springer, Heidelberg, Vol. 3, pp. 1-24, https://doi.org/10.1186/2193-9004-3-9 This Version is available at: https://hdl.handle.net/10419/154683 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/2.0/ ORIGINAL ARTICLE Open Access Dropout trends and educational reforms: the role of the LOGSE in Spain Florentino Felgueroso 1 , Maria Gutiérrez-Domènech 2 and Sergi Jiménez-Martín 3* * Correspondence: [email protected] 3 Universitat Pompeu Fabra and Barcelona GSE, Barcelona, and FEDEA, Madrid, Spain Full list of author information is available at the end of the article Abstract Over the last 50 years, some important reforms in European countries were aimed at improving the system of vocational studies. By contrast, the Spanish educational law (LOGSE) from 1990 moved in the opposite direction. While the LOGSE increased the number of compulsory schooling years from 8 to 10, it also eliminated vocational studies of first grade (FP-I, ages 14 to 16), thereby reducing flexibility. The LOGSE was rolled out at different times across regions within Spain. This is used as an identification strategy to analyse whether the change in law contributed to stop the declining trend in dropout rates observed in the last two decades (they declined from 70% in 1977 to 30% in 1995, but remained at roughly 30% until recent years, twice the EU27 average). Results show that the new compulsory secondary education increased dropout rates for men and decreased them for women. Alternatively, the removal of the lower vocational track had negative effect for both genders, being the effect stronger for women. Finally, by reducing the track choice opportunities for students, the reform reduced the probability of following the vocational track after completion of the compulsory stage. JEL codes: I20, J24. Keywords: School dropout; Educational law; Vocational studies I. Introduction School dropout is one of the main problems of education systems and it is therefore high on the policy agenda in most OECD countries. 1 Concerns about school dropout are based on its potential adverse consequences with respect to perspectives on the labour market, the health condition and the participation in society (Heckman & Lafontaine, 2007). Indeed, social costs associated with school dropout can be large in terms of social exclusion and, for instance, involvement in criminal activity. While dropout rates in Europe have been falling continuously in recent years, they remained stable in Spain between 1995 and 2008. Dropout rates only started to fall in 2008 once the severe crisis expulsed youngsters with low education from the labour market. 2 Nevertheless, dropout rates continue to be significantly high in Spain, 24.9% in 2012, among the highest in Europe, and roughly twice the EU28 average, which stands at 12.7%. A closer look to long-term dropout rates in Spain (see Figure 1) reveals a clear break in its negative trend in the mid 90s. In this sense, it is very interesting to analyse what may have happened in the mid 90s that contributed to deterring the declining process © Felgueroso et al.; licensee Springer. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited. Felgueroso et al. IZA Journal of Labor Policy 2014 2014, 3:9 http://www.izajolp.com/content/3/1/9 of dropout rates in Spain. The hypothesis investigated in this paper is whether the implementation of a new educational law in academic year 1991-92 (Ley Orgánica de Ordenación General del Sistema Educativo, LOGSE, passed in 1990), amongst other factors, contributed to suspend the declining trajectory of dropout rates observed years earlier. This law replaced the previous one (Ley General de Educación, LGE, 1970). The LOGSE was rolled out at different times across regions. This allows us to build up a natural experiment that uses this variation to identify the likely effect of the new educational law on dropout rates and also on vocational track enrolment. We use individual data from the Spanish Labour Force Survey (Encuesta de Población Activa, EPA) from 1987 to 2010, and restrict the sample to individuals from 18 to 24 years old born in the cohorts potentially affected by the reform, between 1977 and 1986. We then test the effect of the educational law LOGSE on the individuals’probability of being a school dropout. 3 The LOGSE in 1990 increased the number of compulsory schooling years from 8 to 10 and, hence, it provided two more years of academic curricula. This way the starting age of non-compulsory secondary education (Bachillerato) increased from 14 to 16 years old and the ending age of primary education moved from 14 to 12. It also delayed the choice between academic or vocational paths for two years, until the age of 16. As a result, vocational studies of first grade (FP-I, ages 14 to 16) were eliminated and all students from that range of age were forced to study secondary compulsory education. Hence, with the reform a more flexible system was replaced by a more rigid new system. In this context, students less keen on continuing their studies towards a more academic type of degree were obliged to proceed and were not given the chance to move towards a more vocational type of training. Overall, the results of the paper suggest that the LOGSE did not have any positive effect on dropout rates. However, this general result hides large differences by gender. For males the introduction of the LOGSE has negative implications on dropout rates, while the reverse is true for women. Alternatively, the removal of the lower vocational track is negative for both, but only significant for women. Note, finally, that the latter effect has also substantial implications on track choice, especially for women. 20 25 30 35 40 45 % Abolishment of FP I Abolishment of 1st &2 nd EGB Figure 1 Evolution of school dropouts in Spain. 1992-2011. Source: European Labour Force Survey (Eurostat). Felgueroso et al. IZA Journal of Labor Policy Page 2 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 The rest of the paper goes as follows. In Section 2, we summarise the literature on school dropout. Section 3 describes the trends and factors underlying school dropout in Europe. Section 4 explains the main educational reforms in Europe over the last 50 years, including the Spanish one from the early 90s (LOGSE), and shows the differences across regions in its implementation. In Section 5, we present the data, the methodology as well as the identification strategy; we discuss the validity of our natural experiment and present some descriptive statistics. The main results obtained from the analysis are described in Section 6. Finally, Section 7 concludes. 2. Literature This section summarises the main research about school dropout distinguishing four main lines. First, some papers investigate the gains from additional schooling and use new compulsory school laws as instruments to estimate the counterfactual for students that would otherwise have left sooner (Angrist and Krueger (1991) and Acemoglu and Angrist (2000) for the US; Harmon and Walker (1995) for the UK; Oreopoulos (2007) for the US, UK, and Canada; Brunello and Rocco (2010) for the European Countries). Overall, they find that compulsion school raises earnings to individuals that otherwise would be dropouts. Other studies find non-pecuniary losses of school dropout such as committing crime or ending up in jail (Lochner and Moretti (2004)) and higher mortality (Lleras-Muney (2002)). For the Spanish case, Felfe et al. (2012) study the effect of extending universal compulsory schooling to age 3 (also introduced by the LOGSE) on childen’s cognitive development. They find sizeable effects on reading skills and weak evidence of a reduction in grade retention. Second,someanalysethechoiceofpost-secondary studies (attending high school, staying at home or employed in various occupations) (Keane and Wolpin (1997), Eckstein and Wolpin (1998) and Arcidiacono (2004, 2005)). For the Spanish case, López-Mayan (2010) analyses the choice between academic and vocational tracks, and she finds that there is a strong association between decreasing the dropout rate in upper secondary education and the increase of annual wage of medium vocational education qualifications. Third, there is research on the determinants of dropout: family background, type of schools, transmission across generations (Dustmann (2004) and Blanden (2009)); the situation of local labour markets (Duncan (1965) and Clark (2007)); and cohort size (Felgueroso and Jiménez-Martín (2009)). For the Spanish case, Mora, Escardíbul and Espasa (2010) look at the impact of expenditure per pupil, class size, and pupil-teacher ratio on dropout rates at the end of compulsory education and find the expected signs, although the magnitude of the effects is relatively small. Lacuesta et al. (2012) find that the increase in Spain of the unskilled to mid-skill wages ratio observed between 1993 and 2001 led to an increase in the fraction of youth who completed at most primary education (or less), but mainly at the expense of a reduction of youth completing upper high school. Finally, some authors evaluate education policies aimed at reducing dropout. A large number of studies look at the financial incentives to continue studying (Dynarski (2003) in the US and Schultz (2003) in Mexico, Angrist and Lavy (2004) in Israel, Dearden et al (2009) in the UK). Overall, the message of all these papers is mixed. Our paper belongs to this group of research since it analyses the impact of the introduction of a new law, the LOGSE, on school dropout. Felgueroso et al. IZA Journal of Labor Policy Page 3 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 3. Trends and drivers of school dropout in Europe and the role of vocational studies Dropout rates are very different across countries. More importantly, Figure 2 shows that most countries reduced their dropout rates over the period 1997-2007, except for Spain and the Scandinavian countries. In fact, Spanish dropout rates decreased from 70% in 1977 to 30% at the end of the 1990s, but remained at roughly 30% until 2008. School dropout rates recently declined to 25% since the recession brought back to study some youngsters. By contrast, Italy and Portugal, the two other EU15 countries with very high incidence of school abandonment, improved their rates between 1997 and 2007. This is especially the case for Italy, whose dropout rate declined ten points. Ireland also experienced a substantial decline in school abandonment over this period, around 7 points, and the rates in UK, Greece and the Netherlands progressed as well around five points. Despite having experienced a slight increase in the prevalence of dropout, the Scandinavian countries continue to hold the lowest dropout rates in Europe. A large number of early school leavers can lead to a dual composition of the population by educational levels: a high share of individuals with high and low educational attainment and by a low share of individuals with medium attainment. As shown in Figure 3, Spain is clearly characterised by this dual composition. Although the fraction of low educated people decreased between 1996 and 2008 (about 17 percentage points), Spain remained well behind other countries (Portugal, Italy and Greece). Moreover, Figure 3 shows that the proportion of population in Spain with medium degree continues to be amongst the lowest in Europe, despite having increased around 7 percentage points over this period. By contrast, the share of highly educated individuals evolved very favourably (around 10 percentage points) and it is currently among the highest, certainly above the EU 15 average. Hence, this data reveals that Spain was quite successful in achieving a large share of population with tertiary qualifications, but did not manage to shift the fraction from low to medium (Felgueroso and Jiménez-Martín (2009)). Other northern European countries are better located in this respect. The composition of the population by educational levels determines a country’sproductivity and livings standards. In fact, studies point out that it is more efficient to devote resources to reach a very large proportion of individuals with secondary education rather BE DK DE IE GR ES FR IT HU NL AT PT FI SE UK CH EU15 0 10 20 30 40 50 0 1020304050 1997 2007 % of the population aged 18-24 with at most lower secondary education and not in education Figure 2 Evolution of early school leavers by country (1997, 2007). Source: European Labour Force Survey (Eurostat). Felgueroso et al. IZA Journal of Labor Policy Page 4 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 than the aforementioned dual composition with a very large number of dropouts and relatively high tertiary rates (World Bank (2005)). Clearly, the reduction of the incidence of school dropout is key to achieve a larger share of individuals with secondary education. Although there are many factors that affect school dropout (the productive model, the socio-demographic characteristics and the economic cycle), the structure of upper education is key (Blondal and Adalbjarnardottir (2009); Pereita and Pastor (2000)). Studies show that one of the key aspects in order to prevent early school abandonment and hence boost medium educational levels is a well-functioning vocational training system (Gangl (2003), Haywood and Tallmadge (1995), Digest (1987), Plank et al. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% AT CZ BE NL FI IT DE SW DK PL FR ES UK IE GR PT HU School-based vocational programs Combined school and work based vocational programs General Figure 4 Distribution of upper secondary education (2007). Notes: Lower level corresponds to the % of population with at most lower secondary education; higher level means the % of population with tertiary education (first or second stage). Source: OECD (2008) and own calculations. AT BE DE DK ES EU15 FI FR GR IE IT LU NL PT SE UK AT BE DE DK ES EU15 FI FR GR IE IT LU NL PT SE UK AT BE DE DK ES EU15 FI FR GR IE IT LU NL PT SE UK 0 10 20 30 40 50 60 70 80 0 1020304050607080 Low (ISCED 0,1,2) Medium (ISCED 3,4) Hi g h (ISCED 5,6) % highest level of education attained in1996 (population 25-64) % highest level of education attained in 2008 (population 25-64) Figure 3 Composition of the population by educational levels in EU 15 (population aged 25-64, 1996-2008). tes: Lower level corresponds to the % of population with at most lower secondary education; higher level means the % of population with tertiary education (first or second stage). Source: European Labour Force Survey (Eurostat). Felgueroso et al. IZA Journal of Labor Policy Page 5 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 (2005) and Field et al. (2007)). They also emphasise that it is positive to use more work-oriented vocational programs. There are other advantages of a well-functioning vocational system: students with practical abilities are better off following a vocational degree (Meer (2007)); countries with an extensive vocational training system tend to have better transitions between education, employment and apprenticeship than countries without these systems (Brzinsky-Fay (2007)). Spain is not very well placed with regards to its vocational system. A report from the OECD (2008) recommends increasing the attractiveness of vocational studies in this country and improving its quality. Cross-country comparison shows that the differences in the weight of vocational studies on the upper secondary level are large (Figure 4). The variation is also significant in terms of how vocational studies are structured: systems that combine school and work programs and others with only school-based vocational programs (see Table 1). We observe, for example, that Austria and Czech Republic are characterised by a high proportion of vocational studies in upper education and they also have a high rate of vocational programs that combine school and work. Other countries with a relatively high prevalence of vocational studies are Belgium, the Netherlands and Finland. On the lower spectrum are located Greece, UnitedKingdomandPortugal. 4 The educational system in each country is the result of educational reforms that took place over the last century (see next section). In this sense, it is very interesting to analyse the implementation of the Spanish educational reform in 1990. The new law somehow moved against this principle by abolishing the possibility of undertaking vocational studies at earlier stages. 4. Educational reforms in Europe Over the last 50 years there have been many educational reforms across countries affecting multidisciplinary aspects. Amongst them, those reforms that were probably more important for the incidence of dropout were those affecting the number of years of compulsory school and those regarding the main organisational and curricular aspects of secondary and post-secondary non-tertiary studies (ISCED 2-4). Simultaneously, there were changes in other educational levels (pre-primary, primary and tertiary education) and dimensions (for instance, with respect to teachers, school autonomy and special education). Although those were also relevant for the well-functioning of the educational system, in general, their impact on early schoolabandonment was probably smaller. For simplification, these reforms are not incorporated in the educational calendar in Figures 5 and 6 but a description of them can be read in Garrouste (2011). Table 1 The role of the educational system (2007) Distribution of upper secondary education Weight of vocational studies High Medium Low Distribution of Vocational Programs High work-based Austria , Czech Republic Germany, Denmark, France Low work-based Belgium, Netherlands, Finland Poland, Spain Ireland, Hungary Medium work-based Italy Sweden United Kingdom, Greece, Portugal Source: Field et al. (2007) and own calculations. Felgueroso et al. IZA Journal of Labor Policy Page 6 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 Figure 5 shows the reforms in the number of years of compulsory education that took place over the last fifty years in several countries in Europe. The range of compulsory years is between 9 and 12. The majority moved compulsory education upwards over this period of time. In particular, it is remarkable the gradual shift from 5-6 to 10 in Greece, Italy and Spain. Most other countries had done this shift earlier on. However, increasing the number of years in compulsory education, in spite of being a positive move in terms of guaranteeing somehow better minimum standards, it does not affect the ultimate level of dropout. More important is how secondary school is organised. Figure 6 shows the reforms in the main organisational and curricular laws of secondary and post-secondary non-tertiary (ISCED 2-4). We observe that most countries implemented changes to the vocational systems to adapt them to new needs and to make their degrees more compatible to academic programs. By contrast, in Spain there was a reform in 1990 (although effective since 1991-1992) that abolished vocational studies of first grade and, consequently, somehow moved in the opposite direction. In Figure 7, we place together the most important reforms over time and the evolution of dropout rates for several countries in order to have a first look on whether there is a potential relationship between them. For the Spanish case, the timing of this law matches the break in the mid 90s of the declining trajectory of the dropout rates. This law was introduced gradually from 1992 onwards being almost fully implemented (100% of the first two courses and 90% of the last two) in the academic year 1998-1999. Figure 5 Reforms in compulsory years of schooling. Source: Garrouste (2011). 1961-1970 1971-1980 1981-1990 1991-2000 2001-2010 BELGIUM (Flemish community, 1984): Enable pupils in vocational education to earn certificates equivalent to the ones conferred in other forms of education. BELGIUM (Flemish community, 1998): Optimisation of the orientation of pupils, so that each pupil would receive an education which corresponds to his own interests and capacities. DENMARK (1977): Introduction of EFGprogrammes in vocational studies where students undertake a whole year at a vocational college bef ore practical training. ITALY (1982): More regulation on vocational training. PORTUGAL (1975): Easier access to a professional career. DENMARK (1996): Enhance quality of vocational education and encourage companies and colleges to organise interactive learning activities. GERMANY (1990): recognition of higher educational diplomas on completion of professional education and training lasting at least 3 y ears. DENMARK (1999): Innovation of the VET programmes. NETHERLANDS (1992, 1996, 1999) : Subsequent innovation sof the VET programmes. FRANCE (1985): Development of relations between schools and companies and creation of the professional “baccalauréat”. GERMANY (1969): Introduction of legal provisions for incompany vocational training. SWEDEN (1970): Reform bringing together upper secondary schools and vocational schools into a single administrative unit. GREECE (1992): Creation of the National System of Vocational Education. SPAIN (1990): Abolition of Vocational 1 st Grade ITALY (2003): Changes in the VET programmes. PORTUGAL (2002): Restructuring vocational training. SPAIN (1970): Organises vocational training into two types: 1 st and 2 nd grade. Figure 6 Main organisational and curricular laws in secondary and post-secondary non-tertiary in Europe. Source: Garrouste (2011). Felgueroso et al. IZA Journal of Labor Policy Page 7 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 In Italy and Portugal, we observe a certain accentuation of their declining profile of dropout rates when they undertook reforms to boost vocational studies. For other countries, the relationship is less clear but none seems to contradict this hypothesis. Therefore, overall Figure 7 shows some signs that indeed the way in which the educational system evolves may be important for the incidence of dropout. 4.1 Educational reform in Spain: the LOGSE The hypothesis tested in this paper is that the implementation of a new educational law in 1991-92, the LOGSE, that replaced the LGE, prevented dropout rates from falling further. Figure 8 summarises the educational path of the two systems. Under the LGE, compulsory education was between 6 and 14 years old and covered the EGB (Educación General Básica) or primary education. Individuals who did not manage to graduate from EGB were obliged (Art 3.2. of the LGE) to move towards lower vocational studies (Formación profesional) until the age of 16 (FP-I). However, the enforcement Art 3.2 of the LGE was not very effective until a new law (LOGSE) was introduced (see Egido (1995), page 79). A student who completed EGB could either choose secondary education –BUP (Bachillerato Unificado Polivalente)orlower vocational studies. A secondary education degree could be followed by academic high school –COU (Curso de Orientación Universitaria), a specialised track to attend university. On the other hand, the LOGSE made compulsory primary education EPO (Educación Primaria Obligatoria) until 12 years old and compulsory secondary education ESO (Educación Secundaria Obligatoria) until 16 years old. After that, the student could either choose Academic High School (Bachillerato) for two years (until 18 years old), 010 20 30 40 50 Denmark dropout 1990 1995 2000 2005 2010 year 010 20 30 40 50 Sweden dropout 1990 1995 2000 2005 2010 year 010 20 30 40 50 Netherlands dropout 1990 1995 2000 2005 2010 year 010 20 30 40 50 Belgium dropout 1990 1995 2000 2005 2010 year 010 20 30 40 50 Portugal dropout 1990 1995 2000 2005 2010 year 010 20 30 40 50 France dropout 1990 1995 2000 2005 2010 year 010 20 30 40 50 Italy dropout 1990 1995 2000 2005 2010 year 010 20 30 40 50 Greece dropout 1990 1995 2000 2005 2010 year 010 20 30 40 50 Spain dropout 1990 1995 2000 2005 2010 year Figure 7 Evolution of dropout and main reforms in Europe. Source: Garrouste (2011), Eurostat and own calculations. In the case of Spain the reform was introduced in 1991-92 but was no fully in place until 1998-1999. Felgueroso et al. IZA Journal of Labor Policy Page 8 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 hence were less affected by its abolition. Another plausible explanation could be that at the end of the 90s there was a change in the production model that affected men and women asymmetrically with more male human capital demanded in construction. In Table 3 Probability of being dropout (All sample) Males Females (1) (2) (1) (2) Demographics Born Abroad 0.1036*** 0.1037*** 0.0699** 0.0694** (3.019) (3.026) (2.006) (1.997) Father present −0.1899*** −0.1900*** −0.1624*** −0.1623*** (-22.795) (-22.803) (-19.794) (-19.740) Mother present −0.1420*** −0.1420*** −0.2094*** −0.2095*** (-13.457) (-13.482) (-16.726) (-16.731) Father dropout 0.1918*** 0.1919*** 0.1165*** 0.1165*** (21.240) (21.219) (14.037) (14.044) Mother dropout 0.0976*** 0.0976*** 0.0801*** 0.0800*** (16.828) (16.858) (14.694) (14.675) Cohort effect 0.0925 0.1107 0.1291 0.0923 (1.290) (1.496) (1.574) (1.186) Labour Market and Business Cycle (regional) Expected real wage 0.0156 0.0207 −0.0499*** −0.0492*** ratio, workers age 30 (0.410) (0.574) (-3.237) (-2.997) Share of employment 0.1821 0.0527 −0.5081 −0.3097 in construction (0.478) (0.134) (-1.298) (-0.821) Unemployment rate 0.3080 0.3397 0.3940*** 0.3831*** (1.295) (1.429) (3.361) (3.078) Growth rate 0.3840 0.3451 0.0625 0.1006 (1.421) (1.248) (0.236) (0.378) Educational Model Educational −0.0300 −0.0282 −0.0103 −0.0151 competences (-1.345) (-1.398) (-0.332) (-0.509) Adequacy rate at 15 (%) −0.0016 −0.0011 0.0008 0.0007 (-1.517) (-1.138) (0.491) (0.417) Incidence of the LOGSE % studying LOGSE 0.1344 −0.1831** (1.019) (-3.226) % studying FP-I −0.0132 −0.0555 −0.2393** −0.1562* (-0.111) (-0.494) (-2.439) (-1.680) % studying ESO-I 0.1254*** −0.0827* (2.745) (-1.827) R-squared 0.064 0.064 0.078 0.078 Observations 53738 53738 51884 51884 Individuals aged 18-24 interviewed between 1995 and 2010. Marginal effects. NOTES: The difference between (1) and (2) relies in the set of educational indicators included in the specification. ***significant at 1%; **significant at 5%; *significant at 10%. Omitted variables: regional & cohort dummies. Marginal effects after probit estimation. Reported t-stats constructed from standard errors clustered by region. Felgueroso et al. IZA Journal of Labor Policy Page 15 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 this sense, in the mid 90s the share of people employed in the construction sector was stable at 10%, but started to escalate in 1998, and by 2000 the ratio was at roughly 12%. To that, the decreasing level of complexity in the curriculum required in secondary school in the LOGSE compared to the LGE (Delibes-Liniers (2006)) also might have contributed to relax the incidence of dropout after the introduction of the new law. This has made easier to complete secondary school and continue towards noncompulsory education. For males, however, it is possible that the simplification in the curriculum did not offset other characteristics of the LOGSE that reduced their incentives to study further. With respect to other indicators of the exposition of the LOGSE, we find that the presence of lower vocational track (FP-I) has a small negative but non-significant effect on the dropout rate for males and a negative effect for females. One explanation is that the existence of FP-I under the LGE helped reducing the negative peer effects in the secondary school since it selected into the more academic track only those students who were more motivated, so the probability of completing not compulsory education is higher for them. Overall, the average of effect of the LOGSE seems to be at least not positive. Averaging marginal effects in specifications 1 and 2 we obtain. Although the joint model is clearly rejected by the data (the complete set of results is available upon request), 7 we want to stress that the average effect of the LOGSE variables (the % studying LOGSE and the % studying FP-I in specification 1 and the % studying ESO and the % studying FP-I in specification 2) is very close to zero. Alternatively, the effect of the fraction studying FP-I, is larger but also non-significant in the two specifications considered. Averaging estimated marginal effect over the two population leads to a similar message, since the estimated average marginal effect is a 0.011 increase in the probability of dropout after the introduction of the LOGSE. Summing up, the effect of the LOGSE is by no means positive. Besides the specifications of the LOGSE, other factors were also important to explain the evolution of dropout. With regards to the demographic indicators, we observe that the pattern is similar across genders, although the magnitude is different. In this context, results clearly show that non-natives have a higher probability of dropout. Data also reveal the importance of the parental role since individuals whose parents were not present in the household were more likely to abandon further education, as well as individuals whose parents had been a dropout. The regression also includes cohort effects to check whether there is a relationship between the relative number of individuals who have the same age and dropout to account for the possibility that perhaps more competition reduces returns to education and then the willingness to study longer (and hence increases dropout). However, we find weak evidence for this hypothesis since the estimates are positive but not significant. Another indicator that may affect the decision of abandoning school is the perception of the opportunities given by the labour market. In this sense, we observe that the higher the expected earnings at the age of 30, the lower female dropout, although this relationship is insignificant for males. With regards to the production model, we observe that the larger the weight of the construction sector, the higher (although the effect is not significant) the probability to abandon further education for men, but the opposite for women 8 . Felgueroso et al. IZA Journal of Labor Policy Page 16 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 The small impact of employment opportunities in the construction sector (or low skill occupations in general), which may surprise the reader, can be due to the fact that our sample period (1991-1999) does not cover the core of the boom of the construction sector. In fact it is quite likely that the boom of the construction sector has stronger effect after year 2000, when the evolution of the Spanish construction sector started to clearly diverge from other European countries. This is line with the research by Aparicio (2010) who finds that the improvement in the labour market prospects of low educated workers motivated by the increases in employment and wages in the construction sector during the recent housing boom raised men’s propensity to dropout of high-school, relative to women. Finally, regarding the educational model, we observe that men and women who studied in the regions with early competences in education tend to have lower incidence of dropout, but this effect is not significant. 6.1 Robustness check: excluding immigrants from the sample In Table 4 we present the results obtained excluding immigrants (about 2 percent of the sample) since they may have not fully studied under the Spanish system or may have extra language difficulties. Although this fact did not play a crucial role in deterring the improving rates of dropout in the last decade, it will probably do over the next years since the proportion of foreigners attending compulsory secondary school will grow considerably (see Zynovieva et al, 2008). Note that the elimination of individuals born abroad does not alter the key conclusions of the analysis. The educational coefficients, that is, % studying LOGSE and the fraction studying ESO-I, remain significant for females and males. However, the coefficient of the fraction studying FP-I, that was significant at 5 percent in the whole sample, losses significance. One possible explanation could be that the positive effect of the existence of FP-I on continuing further education was relatively larger for the immigrant population. 6.2 Implications on the change in the educational law on the track choice The introduction of the LOGSE and, in particular, the progressive removal of the lower vocational track (generally available for students aged 14-16 before the LOGSE) may have had consequences on the path (either vocational or academic) choice. In order to check whether this is the case, we estimate the probability of taking vocational studies after compulsory education. We observe in Table 5 that the coefficient of lower vocational studies is positive and highly significant for females and positive butnotsignificantat5percentformales(in fact, many of the important variables appear to be more significant for females than they are for males). The marginal effect is very large, especially for women. 9 It implies that an increase of one percent in the fraction studying FP-I increases the probability of studying lower vocational studies by 0.41. Consequently, by eliminating the lower vocational track, the LOGSE largely reduced the fraction of women studying the vocational track. The effect for women can be quantified between 4 and 10 percentage points and for men between 2 and 5 percentage points, depending on the year taken as a reference. Felgueroso et al. IZA Journal of Labor Policy Page 17 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 The rest of the results are by no means less important. Particularly interesting are the coefficients of father’s present and father’s dropout (that go in opposite directions), cohort size and the expected real wage ratio (between educational levels 3 and 1) at age 30. In this sense, individuals whose father was present have 6 percent less probability of choosing the vocational track while those whose father was a dropout Table 4 Probability of being dropout Males Females (1) (2) (1) (2) Demographics Father present −0.1937*** −0.1938*** −0.1666*** −0.1665*** (-22.87) (-22.88) (-19.03) (-18.99) Mother present −0.1580*** −0.1579*** −0.2159*** −0.2161*** (-16.52) (-16.58) (-17.41) (-17.42) Father dropout 0.1926*** 0.1928*** 0.1162*** 0.1161*** (21.60) (21.58) (14.63) (14.65) Mother dropout 0.0982*** 0.0983*** 0.0797*** 0.0797*** (17.38) (17.42) (16.29) (16.26) Cohort effect 0.0724 0.0913 0.1296 0.0893 (0.98) (1.22) (1.47) (1.04) Labour Market and Business Cycle (regional) Expected real wage 0.0064 0.0122 −0.0437** −0.0422** ratio, workers age 30 (0.16) (0.32) (-2.56) (-2.34) Share of employment 0.1884 0.0553 −0.4503 −0.2404 in construction (0.48) (0.13) (-1.12) (-0.59) Unemployment rate 0.3074 0.3439 0.3349*** 0.3285** (1.24) (1.39) (2.87) (2.40) Growth rate 0.3868 0.3449 0.0907 0.1278 (1.40) (1.22) (0.34) (0.47) Educational model Competences in −0.0346 −0.0330 −0.0054 −0.0111 education (-1.42) (-1.50) (-0.17) (-0.36) Adequacy rate 15 (%) −0.0015 −0.0011 0.0005 0.0005 (-1.44) (-1.04) (0.32) (0.29) Incidence of the LOGSE % studying LOGSE 0.1402 −0.1911*** (1.01) (-3.28) % studying FP-I −0.0164 −0.0600 −0.1756 −0.0823 (-0.13) (-0.53) (-1.61) (-0.77) % studying ESO-I 0.1364*** −0.0553 (2.91) (-1.33) R-squared 0.07 0.07 0.08 0.08 Observations 52531 52531 50393 50393 Individuals aged 18-24 interviewed between 1995 and 2010. Robustness checks. No immigrants. Marginal effects. NOTES: The difference between (1) and (2) relies in the set of educational indicators included in the specification. ***significant at 1%; **significant at 5%; *significant at 10%. Omitted variables: regional & cohort dummies. Marginal effects after probit estimation. Reported t-stats constructed from standard errors clustered by region. Felgueroso et al. IZA Journal of Labor Policy Page 18 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 have a probability of choosing the vocational track 6 percent higher. Likewise, belonging to a larger cohort increases the probability of selecting the vocational path by about 16 percent, and the higher the expected real wage of educated worker at age 30 Table 5 Track choice: the probability of taking vocational studies vs. the academic track after compulsory education (marginal effects) Males Females (1) (2) (1) (2) Demographics Born Abroad −0.0464* −0.0464* −0.0793*** −0.0793*** (-1.81) (-1.81) (-5.54) (-5.53) Father present −0.0633*** −0.0632*** −0.0555*** −0.0555*** (-7.25) (-7.24) (-7.87) (-7.84) Mother present −0.0425*** −0.0426*** −0.1035*** −0.1036*** (-3.64) (-3.67) (-12.47) (-12.45) Father dropout 0.0632*** 0.0633*** 0.0503*** 0.0503*** (7.03) (7.07) (5.75) (5.73) Mother dropout 0.0140 0.0140 0.0079 0.0080 (1.57) (1.57) (1.06) (1.06) Cohort effect 0.1600** 0.1740** 0.1644*** 0.1691*** (2.10) (2.15) (4.34) (3.82) Labour Market and Business Cycle (regional) Expected real wage ratio, −0.0218 −0.0223 −0.0446*** −0.0432*** workers age 30 (-0.77) (-0.85) (-2.85) (-2.74) Share of employment −0.3834 −0.5175 −0.4537 −0.4826 in construction (-0.99) (-1.36) (-1.29) (-1.35) Unemployment rate 0.0805 0.0570 0.5190** 0.5319*** (0.35) (0.23) (2.55) (2.64) Growth rate −0.0979 −0.1086 0.3611* 0.3422 (-0.30) (-0.33) (1.65) (1.57) Educational model Competences in 0.0239 0.0296 0.0296 0.0298 Education (0.62) (0.84) (0.88) (0.99) Adequacy rate 15 (%) −0.0002 −0.0002 −0.0005 −0.0003 (-0.18) (-0.16) (-0.40) (-0.26) Incidence of the LOGSE % studying LOGSE 0.1193 0.0333 (1.19) (0.28) % studying FP-I 0.2817* 0.2392 0.4093*** 0.4059*** (1.81) (1.56) (3.38) (2.88) % studying ESO-I 0.0277 0.0511 (0.78) (1.22) R-squared 0.02 0.02 0.02 0.02 Observations 33988 33988 39941 39941 Full sample (18-24) that has completed compulsory education. NOTES: The difference between (1) and (2) relies in the set of educational indicators included in the specification. ***significant at 1%; **significant at 5%; *significant at 10%. Omitted variables: regional & cohort dummies. Marginal effects after probit estimation. Reported t-stats constructed from standard errors clustered by region. Felgueroso et al. IZA Journal of Labor Policy Page 19 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 the lower the probability of choosing the vocational track, although the latter coefficient is only significant for women. 7. Conclusions Dropout rates in Spain are markedly high compared to other European countries. After two decades (the 70s and the 80s) of continuous falls they were roughly 30% since 1995 and only decreased further to around 25% with the recession. Obviously, this very high dropout rates may have strong consequences in the future labour opportunities of Spanish workers and may compromise the future growth path of the Spanish economy. This paper explores the role of the educational law (LOGSE) from 1990, and other factors, in explaining why school dropout stopped its declining trend in the last two decades. In this paper we have argued that, by eliminating lower vocational studies, the law moved the educational system in the opposite direction than other educational reforms in Europe. Differences in the timing of implementation of the LOGSE across different regions are used to identify whether this law contributed in deterring the rate of improvement of the dropout rates observed in years before. Our empirical strategy makes use of the demographic information available in the EPA to control for both personal and family characteristics. Results show a negative relationship between the LOGSE and the incidence of school dropout for men. It is of particular interest the fact that the effect is asymmetric by gender. Although a priori this result may be surprising, there are good reasons to think why this could be the case. On the one hand, we observe a positive and significant effect for men since those who were exposed to the LOGSE are more likely to dropout. One very plausible explanation is that the abolishment of FP-I (Lower Vocational studies) for children aged 14 to 16 years old that took place after the implementation of the LOGSE had a negative impact on the willingness to continue studying for men. This was because this sort of studies was more appealing for them. It is also possible that, for boys, mixing the good and the bad students in the same class (in the last two courses of the new track) had worst negative consequences than for girls. A complementary explanation of the differences across gender is the changes in the production model of the economy. That is, it is quite likely that the construction boom from the end of the 90s until the starting of the recession in 2007 contributed to further deter the improving rates of dropout observed in previous years (up to 1994). However, the 2000’s are out of our sample period, so we have to postpone the analysis of this issue to further research. On these grounds, the government approved in July 2011 a new law for Vocational Studies aimed precisely at enabling the transition from secondary degree in ESO to professional programs for students who did not complete their degree. Hence, the new law facilitates the transition to specific programs for professional training. Until now, those were limited to those individuals aged 16 or older who did not complete ESO. Instead, under the new law, individuals aged 15 can have access to these programs for professional training and, if they succeed they can continue towards Vocational Studies. Similarly, the new law enables individuals moving from Medium Vocational Studies to High Vocational Studies without the need of completing secondary non-compulsory school (Bachillerato), and after taking a special course. For that, around 20-30% places Felgueroso et al. IZA Journal of Labor Policy Page 20 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 in High Vocational Studies will be reserved. All these new measures will probably contribute in reducing the high incidence of dropout and are quite in line with our findings. On the other hand, the paper also explored the choice of educational track. We observe that, after the introduction of the LOGSE, the elimination of the lower vocational track starting at age 14 has significantly reduced the choice of the vocational track for both genders, being the effect particularly strong for women. Endnotes 1 The definition of dropout rates is quite broad. In this paper, a dropout is an individual aged 18-24 with at most lower secondary degree and not in further education or training. According to the International Standard Classification of Education (ISCED), this corresponds to having completed at most ISCED 2. 2 In 2008-2012 the incidence of early-school leavers decreased by seven percentage points. This was most likely driven by the recession since youngsters were less attracted by the pool of low-skills jobs that had been easily available before the start of the crisis. 3 Undoubtedly, the Spanish production model, very specialized in low-skill loweducational sectors, also contributed to sustain a very high dropout rate. However, this alternative explanatory factor was more influential in the early 2000’s as documented in Felgueroso and Jiménez-Martín (2009). 4 See Hasluck (2004), Hannan et al. (1996) and Raffe (2008) for further discussion on educational systems. 5 We have also considered the fraction of students in the 3 rd and 4 th grade of ESO (highly complementary to the fraction studying FP-I). However, the inclusion of this variable does not seem to change the key evidences obtained from the analysis. 6 Similar results are obtained when restricting the sample to individuals aged 18-21. 7 The joint model hypothesis is rejected by the data. For example the LR of the test for specification 1 is 262.76, which is distributed as a χ2 40. 8 The characteristics of the construction sector, mainly based on on-the-job training and gender bias jobs, help explain the differential effect we find between men and women. 9 The relatively large effect for women can be explained by the importance of some (quasi-segregated) studies within the lower vocational track, such as the administrative, hairdressing or health related branches Appendix Construction of the variables for the microeconomic analysis Dependent variable: Dropout (a dummy variable that takes value 1 if the individual is a dropout and zero otherwise). An individual is considered to be a dropout if she/he is currently not studying (the variable SIDIV of the survey EPA is different from one) and her/his maximum level of education is primary education or first stage of basic education, age 16 (ISCED < =2). Track choice: A dummy variable that takes 1 if the individual chooses the vocational track after having completed compulsory education. The regression is estimated separately for women and men. Felgueroso et al. IZA Journal of Labor Policy Page 21 of 24 2014, 3:9 http://www.izajolp.com/content/3/1/9 Covariates: Three different measures of the degree of exposure to the LOGSE: 12-17 years old LOGSE index: fraction of the 12-17 population under the LOGSE (ESO-I & ESO-II & Bachillerato). 12-13 years old LOGSE index: fraction of the 12-13 population under the LOGSE (ESO-I). FP-I: fraction of the 14-15 population studying FP-I. Individual factors Nationality: dummy one if born abroad (non-native). Parental presence: dummy one if mother presence (mother) and dummy one if father presence (father). Parental education: dummy one if mother was a dropout (mother dropout)and dummy one if father was a dropout (father dropout). Cohort effect: a measure that combines the relative number of individuals who have the same age with respect to the region size (direct competition to the individual) and the relative number individuals who are 1 or 2 years around the individual’s age (with a weight of 2/3) reflecting the partial competition. This follows the normalisation of Welch (1979). Regional and time factors Measure for dropout earnings: the ratio between the expected earnings at age of 30 of educational level 1 and 3 (earnings gap). The proportion of students of 15 years old that are studying in their corresponding year in percentage (adequacy rate at 15) at regional level. Regional unemployment rates. Regional employment share in construction. Regional annual percentage change of the regional PIB. Regional educational competences: a dummy one for those regions who have competences in education. Competing interests The IZA Journal of Labor Policy is committed to the IZA Guiding Principles of Research Integrity. The authors declare that they have observed these principles. Acknowledgements Sergi Jiménez-Martín and Florentino Felgueroso thank financial help from the Spanish Ministry of Education, projects #ECO2008-06395-C05 and #ECO2011-30323-C03-02. 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IZA Journal of Labor Policy Submit your manuscript to a journal and benefi t from: 7 Convenient online submission 7 Rigorous peer review 7 Immediate publication on acceptance 7 Open access: articles freely available online 7 High visibility within the fi eld 7 Retaining the copyright to your article Submit your next manuscript at 7 springeropen.com Felgueroso et al. IZA Journal of Labor Policy Page 24 of 24 10.1186/2193-9004-3-9 2014, 3:9 2014, 3:9 http://www.izajolp.com/content/3/1/9