How do schools and colleges contribute to a young person’s labour market outcomes?

This research used data that is now available via the Office for National Statistics (ONS) Secure Research Service, which is being expanded and improved with ADR UK funding.  

Authors: Jenna Julius, Jude Hillary, and Henry Faulkner-Ellis (National Foundation for Educational Research, funded by the Edge Foundation)

Date: February 2022  

Research summary

A research study using secure data has found that the institution which a young person attends for their main post-16 qualification has a small but significant impact on their longer-term outcomes. This research suggests that destination measures have the potential to help schools and colleges better understand how they are preparing young people for the future labour market.  

This project was funded by the Edge Foundation to investigate the potential for using the Department for Education’s (DfE) Longitudinal Education Outcomes (LEO) dataset. This dataset enabled the researchers to track historical labour market outcomes of young people (up to the age of 30), who completed their education in the English education system. The project also provided information about the value that schools and colleges can add to young people’s destinations and how they can support young people’s progression into the labour market. 

Data used

This project was one of several pilots chosen by DfE to extend the LEO data to third party researchers. 

The DfE has collaborated with other areas of government to create the LEO de-identified linked administrative dataset. LEO brings together data from:

• the National Pupil Database
• Individualised Learner Records
• Higher Education Statistics Agency (HESA)
• Department for Work and Pensions (DWP), which includes income, employment and benefit data.

The dataset currently holds information up to 2018/19, however the data made available for this pilot project was up to 2016/17. This dataset allows researchers to relate longer-term labour market outcomes back to the institution where young people studied their main post-16 qualification, enabling research which would not have been previously possible.

Methods used

There are multiple factors that impact a young person’s labour market outcomes, such as their prior attainment, family background and individual characteristics. The project used an econometric approach to account for these factors, enabling the researchers to identify the impact of studying at a school or college on their later life earnings or future employment status over and above observable learner characteristics.

The researchers analysed the trends within the cohort born in 1987/88 who started their main post-16 qualifications in 2003/04. This is because their labour market history could be tracked for the longest using the data that was made available for this pilot. The researchers categorised every young person within the cohort using outcome definitions that were developed by the DfE. These outcomes are:

• Sustained education: In education at least one day in each of the 12 months of that financial year
• Sustained employment: In employment at least one day in each of the 12 months of that financial year, and not identified as being in sustained education
• Sustained self-employment: Self-employed at least one day in each of the 12 months of that financial year, and not identified as being in sustained education or employment (this information is only available for the last three years of data)
• Claiming benefits: On benefits at least one day in each of the 12 months of that financial year 
• Without a sustained education or employment destination: In education, employment or on benefits which was not sustained in the previous 12 consecutive months. This category would, for example, include young people who had just transitioned from education to employment.
• No destination identified: Not identified as being in any of the categories above. This group includes those who are not in education or employment or claiming benefits, who have moved overseas and those who are deceased.

To estimate the value that institutions add to a young person’s labour market outcomes the researchers used a two-stage approach, drawing on a multivariate model with either earnings, or where the individual ended up in a sustained education or employment destination, as the dependent outcomes. The researchers included a detailed set of pupil and qualification-level controls to account for differences in pupil characteristics and qualifications undertaken across institutions and ran regressions separately by gender.

Research findings

This project found that the institution that a young person attends for their main post-16 qualification has a small but significant impact on their longer-term earning and employment outcomes. However, context should be considered when understanding and interpreting destination measures. This is because young people’s progression pathways systematically differ based on their background characteristics, such as gender, ethnicity, special educational needs, eligibility for free school meals and region.

The researchers also found that a young person’s destination varies significantly based on their performance by the age of 16. For the 2003/04 post-16 cohort, young people who achieved five A*-C in their GCSEs were a third more likely to be in sustained employment and over five times less likely to be receiving benefits at age 25 compared to young people who did not achieve five A*-C in their GCSEs.