Life-cycle educational choices in a system with early tracking and 'second chance' options

- We study life-cycle educational transitions in the German education system which is characterized by early tracking and institutionalized branches of academic and vocational training, but with the possibility to revise earlier decisions at later stages.
- Our empirical model covers all major transitions ranging from primary and secondary schooling to different forms of tertiary education and vocational training.
- Our results suggest that a considerable proportion of the population takes 'second chance' decisions but that these decisions are as socially selective as the standard routes through the system.
- We explore and highlight the importance of including information on previous transitions into sequential models of educational decisions.
- We model and document a considerable amount of sorting along unobserved heterogeneity across the stages of the system, especially for 'second chance' decisions.

We study life-cycle educational transitions in the German education system which is characterized by early tracking and institutionalized branches of academic and vocational training, but with the possibility to revise earlier decisions at later stages. Our econometric model covers all major transitions ranging from primary education through secondary schooling to different forms of tertiary education and vocational training. We consider the role of previous decisions and background characteristics at each decision node and also study 'indirect' routes through the system. Our results suggest that a considerable proportion of the population takes 'second chance' decisions but that these decisions are as socially selective as the standard routes through the system. We also model unobserved heterogeneity and document the sorting of individuals along unobserved characteristics across the stages of the system.