Empirical studies have found strong positive effects of family background
variables on educational attainment. Family socioeconomic status, operationalized by
educational levels or occupation of parents, family income, or some combinations of these
is found to increase (decrease) the likelihood of college enrollment and college graduation
(college dropout) (Manski and Wise, 1983; Manski, 1989; McLanahan, 1985; NCES,
1989; Kane, 1994). These findings demonstrate the significant influence of family
backgrounds in determining youths’ educational attainment.
Unlike in the study of high school dropout, there is relatively little of empirical
study on the effect of local labor market conditions on college enrollment and college
dropout. In one of the few studies, Kane (1994) found that unemployment rates were not
related to individual enrollment decisions for blacks or whites.
The decision whether or not to attend college is made with imperfect information
(see Manski, 1989; Altonji, 1993). Thus, individuals may dropout of college if they
subsequently learn after enrolling that the “costs” of schooling are higher than they
expected. Also, individuals who do not enroll in college immediately after high school
graduation may subsequently enroll if the subsequently learn they are ill-suited to
occupations that require only a high school education (see Miller, 1984; McCall, 1990;
and Neal, 1999).