Scandinavian Working Papers in Economics

Institute for Futures Studies

No 2011:8: Dropping out in Scandinavia Social Exclusion and Labour Market Attachment among Upper Secondary School Dropouts in Denmark, Finland, Norway and Sweden

Olof Bäckman (), Vibeke Jakobsen , Thomas Lorentzen , Eva Österbacka and Espen Dahl
Additional contact information
Olof Bäckman: Institute for Futures Studies, Postal: Institute for Futures Studies, Box 591, SE-101 31 Stockholm, Sweden
Vibeke Jakobsen: SFI, Copenhagen
Thomas Lorentzen: Rokkan Centre, Bergen University
Eva Österbacka: School of Business and Economics, Åbo Akademi University, Turku
Espen Dahl: Oslo University College

Abstract: The Nordic countries share many features as far as welfare state and labour market institutions are concerned. However, the upper secondary school systems differ significantly in how the vocational tracks are organized. In Denmark and Norway vocational tracks are dual, i.e. they combine school based education and work place apprenticeships, whereas in Finland and Sweden they are primarily school based. We explore the claim that the organization of vocational tracks can provide one important explanation to between country variations in school-to-work transition success rates. By answering the questions “Do dropout rates both in general and in different educational tracks differ between the Nordic countries?” and “Is the labour market effect of dropping out from a vocational track different in Finland and Sweden as compared to Norway and Denmark?” we try to evaluate this claim. We use annual longitudinal data from public records in the four countries. In Norway and Sweden the data cover the total populations whereas in Finland and Denmark we use large samples of the populations. To measure labour market outcomes we utilise a model prepared particularly for use on public income records and which has been calibrated to enhance comparability across the Nordic countries. We find the highest dropout rates in vocational tracks in Norway and the lowest in Finland. The results also indicate that the relative effect of dropping out from a vocational track is least detrimental in Sweden and most detrimental in Norway, as far as labour market exclusion is concerned. For those with diplomas from vocational tracks the results confirm previous findings indicating that apprenticeship based systems provides a smoother school-to-work transition process than school based systems. The smaller risk among Swedish vocational school dropouts is to a large extent explained by the system for adult education in Sweden which seems to be better equipped to embrace dropouts and provide them a second chance than the systems in the other countries.

Keywords: Nordic Countries; upper secondary school systems; dropping out

JEL-codes: I21

40 pages, September 6, 2011

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