Prior research has shown that students from lower socio-economic backgrounds are less likely to graduate. We examine if this can be explained by background-specific pathways into higher education. Many students in Germany enter higher education with a vocational qualification and prior vocational qualifications occur more often among students from lower socio-economic backgrounds. We argue that vocational qualifications shift opportunity structures and opportunity costs of students who have to decide between continuing higher education and alternative options. We therefore examine if parental background and vocational qualifications are associated with the destinations after non-completion. We distinguish the destinations “re-entering higher education”, “vocational training” and “skilled employment”. Using the German Educational Panel Study (NEPS starting cohort 6), we apply competing risks models. Our results show that non-completers from higher socio-economic backgrounds are more likely to re-enter higher education than non-completers from lower socio-economic backgrounds. The higher rates of transfer to skilled employment among non-completers from lower backgrounds are mainly due to the fact that they more often hold a vocational qualification and have good chances to enter the skilled labour market without additional educational investments. Our results hence shed some new light on the question how vocational training “diverts” lower background students from higher education. © The Author(s) 2024.
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