The school-to-work transition, skill preferences and matching

This empirical paper investigates skill formation in the youth labour market. Using event-history data collected from the administrative records of Lancashire Careers Service, we model skill preferences formed at school by young people and skill destination, ie the occupation of the first job/training scheme after leaving compulsory schooling. We also model the duration of the individuals first unemployment spell. Competing risks models with flexible piece-wise linear baseline hazards and unobserved heterogeneity are estimated. There is evidence of occupational segregation by gender, unrealistic occupational preferences and excess supply of skills. Outcomes are mainly determined by examination performance, ethnicity and whether disadvantaged.