The percentage of 16-year-olds opting to remain in full-time education has fallen for the first time in a decade, according to unpublished research from the Institute of Education.

The average annual growth rate of 4 per cent suddenly and unexpectedly reversed in 1994/95 when staying-on rates dropped by 1 per cent. Author of the research Ken Spours said the figures signal the start of "a new crisis" in post-16 education.

"Full-time participation has peaked at 16 and is heading that way at 17 and 18," he said. "Everything is freezing up and this will be felt later through the system because the rises in A level and vocational attainments since 1987 have depended on rising participation.

"A natural plateau has now been reached, contrary to the assumptions of education planners that 16-plus participation is a rising trend. The crucial years are yet to come."

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Several reasons are suggested for the downturn. The first is a slight improvement in the youth labour market. Other factors are worsening drop-out rates in further education and dwindling recruitment in "hard-to-reach" sections of the age cohort above the 70 per cent participation level.

A draft of the report, Post-16 Education and Training: Statistical Trends, shows that since 1974 participation in post-16 education has increased, with particularly rapid growth since 1987.

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However, the growth at 16-plus ceased in the current year and there are sharp reductions in the rate of increase at 17 and 18.

"This means that for many students, full-time participation beyond 16 is relatively short-lived," the report says.

Full-time participation trends at 17 and 18 suggest they will follow the same trend as at 16-plus and may also reach zero growth by 1996/97, the report says. Critical factors will be levels of course retention and progression.

"A low 17-plus participation rate points to low successful completion rates in all types of courses and problems of progression, particularly from NVQ level 2 to level 3."

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Within the national trend there are significant regional variations and the north/south divide is sharpening dramatically. Staying on is more prevalent in the south. In 1988 the difference was 9 percentage points. By 1994 this had grown to between 16 and 20 percentage points. On the other handparticipation in Youth Training or Training Credits is four times higher in the north.

"Despite improvements in participation since 1987, the UK is still lagging significantly behind full-time participation rates of most competitor countries particularly at 17 to 24," the report says. "We perform least well in tertiary participation and most well in higher education participation."

Demographic trends show that the number of 18-year-olds will start to rise after this year.