Does the Economic Productive Structure Determine Early School Leaving Rates? Evidence from Spanish Regions, 2000-2013

In this paper, we analyse to what extent regional economies' specialization in unskilled-intensive productive sectors accounts for higher early school leaving rates in their school systems. Using panel data for 17 Spanish autonomous regions (2000-2013), we find strong empirical evidence to support the fact that regional economies specializing in sectors like the construction industry, agriculture and services (excluding the public sector) have bigger school dropout rates than those where the public sector is more important. Our results complement those of microdata-based studies of the determinants of early school leaving rates that focus on individual preferences, the parental status and social framework. The conclusion that can be drawn from our study is that education policies aimed at reducing school drop-out rates should be designed to take the productive structure of the regions where they will be implemented into consideration.