Explaining the Socio-Economic Gap in School Completion Rates

A study just published by academics from the University of Melbourne has found that student and parent aspirations are key factors contributing to the large gap in school completion rates in Australia between low and high socio-economic status (SES) students. Another key factor is lower achievement by low SES students at age 15.

Dropping out of school has deleterious effects on the careers and life prospects of young adults. A large body of literature demonstrates that early school leavers have difficulty finding and retaining employment and are more likely to be in low-paid jobs compared to those who complete school. Closing gaps in completion by SES will help address the imbalance in student opportunity by family background and reduce intergenerational inequity.

The study estimated completion rates at 66 per cent for low SES students, 78 per cent for medium SES students and 90 per cent for high SES students. After allowing for rounding, there is a 12 percentage point gap between low and medium SES students and a 23 percentage point gap between low and high SES students.

The study attempted to explain these gaps by quantifying the relative contribution of a large range of factors related to SES including school, home and peer characteristics. It used data from the 2003 OECD PISA study linked with data from the 2003 cohort of the Longitudinal Survey of Australian Youth. It found that the two main factors are lower education aspirations of low SES students and their parents and lower academic performance at age 15 by low SES students.

Differences in education aspirations of students and their parents at age 15 contribute about 9 of the 23 percentage point gap between low and high SES students and lower academic performance at age 15 a further 7 percentage points. Together these factors explain about 70 per cent of the gap in school completion.

Differences in education aspirations contribute about 3 of the 12 percentage point gap between low and medium SES students while lower academic performance at age 15 contributes about 4 percentage points. Together these factors explain about 60 per cent of the gap.

The study found that differences in the characteristics of schools attended by low and higher SES students after age 15, such as differences in governance, resources and student peer characteristics, are less important in explaining the difference in school completion rates. In particular, school sector (government, Catholic, Independent) and restrictions on hiring and firing of teachers have little effect on differences in completion rates. Together, school characteristics account for only 1.5 of the 23 percentage-point gap between low and high SES and around 1 of the 12 percentage-point gap between low and medium SES. Thus, while these school characteristics may affect academic performance up until age 15, they play only a small part in explaining differences in completing school by SES.

Interestingly, the study found that the SES school completion gap between low and medium and low and high SES is closed by 1 and around 1.5 percentage points, respectively, by more positive attitudes of teachers in low SES schools. A positive school culture appears to have a greater effect on retaining low SES students than higher SES students. The authors state that this result underlines the particular importance of teachers in promoting a positive learning culture in low SES schools where academic achievement may not be the norm among students and their parents.

There is a significant unexplained aspect of the gap in school completion rates. It accounts for about one-third of the gap between low and medium SES students and a fifth of the gap between low and high SES students. This may be due to factors not included in the study for which there is no PISA data, such as after-school tutoring which increases in the last two years of secondary school and which medium and high SES families make more use of than low SES families.

The authors conclude that what is important about their finding is that while prior academic performance matters, it only accounts for less than half of the SES gap in school completion. They state that this underlines the importance of taking a multi-faceted approach to closing the gap in completion and not just focusing on improving low SES test scores.

Cain Polidano, Barbara Hanel & Hielke Buddelmeyer 2013. Explaining the Socio-economic Status School Completion Gap, Education Economics, 21 (3): 230-247.

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