Education and Youth Unemployment: A Reappraisal

It is a widely held belief that labour market failure amongst young people is heavily influenced by formal educational attainments. Few British studies, however, have paid specific attention to the question of what particular level of academic achievement is valued most highly by the market within any period of time. This article queries the focus of earlier research – explicitly concerned with education and labour market fortune – which implicitly suggested that the Certificate of Secondary Education was of prime importance in securing employment for the youngest members of the labour force in recent years. Moreover, it is demonstrated that omitting controls for influences frequently held to be important determinants of educational attainment generates upward bias in the estimated returns to education and thereby inflates expectations as to the benefits likely to follow from even seemingly radical reforms to the formal schooling system.