Staying-on at school at sixteen: the impact of labor market conditions in Spain

Despite the recent increase in educational investment, Spain still ranks towards the
bottom of the
OECD country list for the level of its human capital stock and the new inflow of high school
graduates. We address this issue by empirically investigating the impact of family characteristics
and local labor market conditions on the demand for secondary education beyond the age of 16.
Our results show that the record levels of Spanish youth unemployment, that should discourage an
early entry into the labor market, do not seem to have enhanced substantially the probability of
staying on at school at 16. It seems instead that parents' education is the main determinant of
enrollment rates in Spain. This sort of inter-generational dependence clearly implies a strong
persistence in the Spanish stock of human capital, and a slow convergence towards OECD standards.