Impact of household factors on youth's school decisions in Thailand

•The paper analyzes the household factors that determine the investment decision on youth's education.•The paper also decomposes the school enrollment rate gap between municipal and non-municipal areas.•Family background significantly affects youth's school decisions.•Household income and parental education account for municipal/non-municipal gap in school enrollment.

This paper uses Fairlie's techniques to estimate differences in school enrollment between municipal and non-municipal area, we found that group differences in all explanatory variables explain approximately 70% of the gap. Education level of household head is the largest significant factor accounting for a gap in males’ school enrollment whereas the largest factor explaining the municipal/non-municipal gap in school enrollment rate of female 15–17 of age is income.Based on empirical results, some educational policies are suggested to increase school enrollment of Thai youths. Demand-side financing policies such as target vouchers should be used to the chance of schooling especially for those facing financial difficulty. Non-formal education and distance learning could be used to provide alternative and more appropriate way of learning for married youths. Establishment of child care center in a community can reduce workload of youths in taking care of young family members and allow them to participate in school activity.