Dropout and Enrollment Trends in the Postwar Period: What Went Wrong in the 1970s?
Using a variety of data sources, this chapter documents trends in school enrollment and completed schooling attainment. It assesses the role of various demand-side factors affecting the decision of when to leave school, including changes in the expected rate of return to an additional year of education, the level of real interest rates, tuition costs, and cyclic labor market conditions. The chapter begins by using individual micro data from the General Social Survey to analyze the contribution of changing family-background factors to intercohort trends in high school and college graduation. Next, it discusses the effects of three local-level variables: state unemployment rates, tuition levels at state colleges and universities, and the relative size of the high school cohort in the state. It also uses data from the National Longitudinal Survey of Youth to show that dropping out of school is, by and large, a once-for-all decision since only a small fraction of dropouts eventually return to school. The chapter also suggests that enrollment and completed education can be used as comparable measures of trends in academic achievement.
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