School consolidations (school closures, mergers, and expansions) have become an increasingly popular policy measure across Western countries facing decreasing fertility, fiscal constraints, and increasing learning disparities. Reducing the regional availability of post-compulsory education may affect choices to participate in education or sorting of individuals across education tracks and schools. These decisions may have long-lasting effects on the schooling and career paths of individuals. Furthermore, school consolidations may increase the regional disparities in the availability of education and thus, introduce inequalities in human capital accumulation between individuals living in different regions. They may also boost differences in skill composition between regions.
Research on the effects of school consolidations has concentrated almost exclusively on the effects of closing compulsory schools and the evidence on how closing secondary schools affects the local youth is limited. Our new study Virtanen and Riukula (2020) explores how reducing the regional supply of post-compulsory education affects schooling choices and educational attainment in Finland using both difference-in-differences and event study methods. We exploit variation across municipalities and over time in the availability of three secondary education tracks: general education, and the vocational fields of technology and services.
According to our results, access to general education mainly affects decisions regarding what to study, whereas reducing the regional availability of vocational education also postpones studies and may even decrease the educational attainment of local youth. Our results also suggest that school consolidations may have a substantial impact on labor market trajectories. We find that the initial enrollment choices of men are more sensitive to supply reductions than those of women, and that the field of technology is particularly important for individuals with less-educated mothers.