Educational Reform and Labor Market Outcomes for Swedish Early School Leavers with Migrant Background

This study explores the effects on tertiary education and labor market outcomes of the Swedish 1994 educational reform. The educational reform drastically increased the frequency of early school leaving among Swedish youth. However, it also strengthened the meritocratic aspect of the educational system, making academic performance in compulsory school a stronger predictor of school leaving. Female students and students with migrant background are often found to exhibit stronger academic preferences. According to the dominant discourse, reducing early school leaving will produce beneficial outcomes at both individual and aggregate level. However, if structural factors outweigh the increase in productivity, such aggregate level effects might be absent. From this point of departure, three questions were asked (1) Did the 1994 educational reform have long-term effects on the propensity for tertiary education? (2) What impact did the reform have on labor market outcomes for early school leavers? (3) Did the 1994 Swedish educational reform impact students differently, depending on their gender or immigrant/non-immigrant background? Data for the study was drawn from the longitudinal databases of Statistics Sweden. The labor market and educational outcomes for 970,422 students graduating from compulsory school in 1991 through 2000 were followed over fifteen years. Results show that women and students with migrant background were less negatively affected by the reform with regards to education, and that non-leavers became more likely to pursue higher education. However, the increased educational polarization between school-leavers and non-leavers did not produce increasingly polarized labor market outcomes. This questions the idea that reducing early school leaving is a panacea for social ills, instead suggesting that general changes in educational levels might make other factors, including gender and ethnicity, more important in producing labor market outcomes.