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The government's success in reducing youth unemployment may conflict with its policy of expanding higher education, research shows.
Unemployment fallen among 18 to 24-year-olds, down from 13 per cent in 1997 to 10 per cent this year, according to official figures. This encourages more young people to leave school to find work rather than staying on to study for A levels or vocational equivalents.
The research by Damon Clark, who is an affiliate of the Centre for Economic Performance, based at the London School of Economics, correlates good performance at GCSE with increased likelihood of staying in education beyond 16.
Dr Clark notes that over the past 20 years, there has been steady improvement in GCSE pass rates. More than half of pupils now gain five or more GCSEs at grades A* to C, according to the government.
This implies a rise in the numbers gaining A levels and their equivalent. About 90 per cent of people gaining two or more A levels go on to higher education.
Dr Clark says there was an increase in the number of pupils staying on during the 1980s and early 1990s. That period saw rapid expansion in higher education.
But Dr Clark shows that this trend has slowed over the past nine or ten years as a result of falling youth unemployment.
He describes the decision to stay on at school as an "investment choice". In other words, many young people weigh up the likelihood that they will improve their employment opportunities by staying at school, and perhaps going to university, against the immediate costs of the income they are losing by not getting a job.
Dr Clark said: "While the positive nature of this correlation is evident, the remarkable feature is that the staying-on standstill occurred despite steady increases in exam achievement."
An article based on Dr Clark's research can be found in the current edition of CentrePiece , magazine of the CEP.