An analysis of the impact of socio-economic disadvantage and school quality on the probability of school dropout

This paper combines the Australian Programme for International Student Assessment (PISA) micro-level data with its longitudinal continuation, the Longitudinal Survey of Australian Youth data, to measure the association between individual PISA scores and early school dropouts. We use multilevel modelling to distinguish between student and school factors when estimating school dropout propensity for 15–18-year olds. We model attrition and deal with the possibility that PISA scores are endogenous in the dropout decision. We find that PISA scores predict well early dropout, especially so for bottom achievers, and that individual and social disadvantage plays a crucial role in this relationship, both directly and indirectly.