Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207426 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12601
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper surveys the theoretical approaches used in the literature to study the phenomenon of delayed graduation and university dropout. The classical human capital model does not contemplate failure, which the amended human capital model does. Delayed graduation and university dropout are two stages of the same decision repeated over the years to step aside or leave when the net returns to education expected ex ante are negative. Failure can also be taken as a signal of the real skills of individuals who do not succeed to gain a higher level of education. The job search approach underlines the role of positive/negative local labor market conditions as a factor able to explain choices of investment in human capital. Within the bargaining approach, the decision to delay graduation or dropout from university is related to bargaining within the family between parents and children: the former give their children better consumption opportunities in return for their presence at home. Although the amended human capital model is certainly the most compelling one, the other approaches help framing factors which are neglected in the human capital model, forming a well-structured body of knowledge to better understand the phenomenon under scrutiny, while also suggesting a set of policy tools to better control it.
Subjects: 
elapsed time to degree
postsecondary education
ex post and ex ante returns to education
university fees
human capital
signaling
job search
bargaining
JEL: 
H52
H75
I21
I23
I28
J13
J24
Document Type: 
Working Paper

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