The aim of this paper is to analyze the selection process at work before and after compulsory schooling by assessing the determinants of school failures, dropouts, and upper secondary school decisions of young Italians. The data-set is built combining individual data by the Labor Force Survey and aggregate data on local labor markets and school supply by the Italian National Statistic Institute and the Minister of Public Education, respectively. Our results show that school failure (i.e., repetition of a year) is highly correlated with the family background, and it strongly affects later choices. Early school leaving and the upper secondary school choice are mainly a reflection of the parents' socioeconomic status. The effectiveness of the educational system when narrowing the failure risk and the scholastic outflow relies on the widespread adoption of full-time attendance in compulsory school, the quality of the school infrastructures, and the fewer teachers with temporary contracts. (Contains 7 tables and 20 notes.)