185 M. Binder Economics of Education Review 18 1999 183–199
important.
3
A positive relationship between an economic downturn and schooling should not then be interpreted
as a pure price effect, since it also may contain a positive response to the rate of return to schooling, especially in
the changing economic environment of Mexico in the 1980s.
3. Evidence from industrialized countries
Ultimately, the effect of a recession on schooling decisions is an empirical question, which has not, appar-
ently, been applied to developing countries.
4
Cross-sec- tional and time-series analyses for industrialized coun-
tries generally find a positive income effect and negative price effects, where price is measured by both tuition
for direct costs and the unemployment rate for fore- gone costs.
5
The elasticities for income are usually much larger than those for unemployment. This gen-
eralization appears to hold for school-leaving in Great Britain Whitfield and Wilson, 1991; Rice, 1987; Pissar-
ides, 1981,
6
as well as for high school and college enrollments and college entry Betts and McFarland,
1995; Kane, 1994; Manski and Wise, 1983; Mattila, 1982; Lehr and Newton, 1978 in the United States.
In addition, the following patterns emerge: 1 high school and community college enrollments appear to be
more responsive to economic variables than four-year college enrollments Mattila, 1982; Betts and McFarland,
1995, 2 blacks tend to have higher elasticities than whites Kane, 1994, and 3 the college enrollment rates
of younger men are more elastic than those of older men Mattila, 1982. In each of these cases, the more respon-
sive group likely has a higher proportion of marginal schooling decision makers. For blacks and community
college students, high elasticities may arise from low income. Low income families are more likely to face
binding liquidity constraints and may have a low valu- ation of consumption component of schooling relative to
the investment component.
7
Similarly, the potential high school population will have a lower mean income than
3
Author’s survey conducted in Guadalajara, Arandas and Tijuana in 1993.
4
Despite an extensive search, I could find no such studies in either the English or Spanish language literatures.
5
Many studies control for returns to schooling, so that the unemployment rate can be unambiguously interpreted as a
price effect.
6
One notable exception is Micklewright et al. 1990, who find a positive relationship between unemployment and
school-leaving.
7
Manski and Wise 1983 find that parent schooling is more influential than parent income in the decision to enroll in col-
lege. This may reflect a relatively larger consumption compo- nent in the decision to pursue schooling.
the college-bound population Manski and Wise, 1983. The younger age category in 3 also contains more mar-
ginal decision makers, since the decision to attend col- lege is typically made in the last year of high school.
Men who begin to work rather than enroll in college face higher opportunity costs of college as they gain experi-
ence in the labor market.
4. Overview of the Mexican schooling system
8
The United States and Great Britain studies focus on post-compulsory and post-secondary schooling. In Mex-
ico, relatively low levels of schooling attainment make a primary and secondary schooling focus more appropri-
ate. Under the Mexican constitution, the six years of pri- mary education are compulsory, and since 1992, three
years of secondary school instruction have been added to the requirement. Nevertheless, even a primary school
education has yet to become universal. For example, in 1990 thirteen per cent of 15–19 year-olds had attained
only four years of schooling or less Inegi, 1992. Twenty per cent of primary schools—primarily in rural
areas—offered less than a full six-year program in 1988 Salinas de Gortari, 1989. And of those who entered
first grade six years earlier, only 59 per cent graduated from primary school in 1994.
The proportion of primary school graduates who con- tinued their studies in secondary school fluctuated
between 84 and 88 per cent in the 1980s, and these rates varied more widely among states. Mexico City
9
and Sonora had continuation rates close to 100 per cent in
1993, while Guanajuato had a rate of only 75 per cent.
10
Secondary school consists of separate lower and upper levels consisting of three grades each. Both levels pro-
vide a vocational option. The vast majority of the lower- secondary students 86 in the 1993–94 school cycle
enroll in the academic program. The rest attend terminal junior vocational programs, where studies range from
mechanics to cosmetology. More than half of all junior vocational students study in private schools. The
efficiency rate of the lower-secondary academic program hovered around 60 per cent throughout the 1980s.
During the same period, between 80 and 85 per cent of the lower-secondary academic graduates enrolled in
either the upper-secondary academic level or senior
8
Unless otherwise noted, figures in this section were calcu- lated from published Secretary of Public Education data
described in more detail below.
9
Mexico City, the federal district, is treated as a state for the purposes of this study.
10
Note that continuation rates may be inflated by students who enter the next schooling level several years after graduating
from the previous level.
186 M. Binder Economics of Education Review 18 1999 183–199
vocational programs. Of all students at the upper-second- ary level, eighteen per cent are enrolled in vocational
programs. The majority of these vocational students- about 70 per cent—study in public institutions.
5. Data sources and implementation
