England's education secretary is said to be exploring ways to raise the school leaving age to 18.
Many young people end their education at age 16
Alan Johnson told political journalists that "staying on" rates must improve.
He said it was unacceptable for a 16-year-old to be in employment without getting help with continued schooling or training for qualifications.
An aide said later that ways of overcoming the complex legal problems associated with raising the leaving age were under consideration in Whitehall.
Figures published in June show 76.2% of 16 to 18-year-olds in England are in education or training, rather than in employment.
The leaving age was last raised, from 15 to 16, in 1972.
At a Westminster lunch, Mr Johnson said: "Forty, 50, 60 years ago, seeing a 14-year-old at work was perfectly acceptable.
"Now it is totally unacceptable.
"And it should be just as unacceptable to see a 16-year-old just working and not doing anything else, not receiving any training or schooling."
Mr Johnson said the UK could learn form other countries, notably Canada, where schemes to encourage young people to stay on in education had proved successful.
The matter was the most important facing his department, he said.
"It has all kinds of social ramifications for our citizens ... to engage children in education in a far better way and to end the situation where at the moment they switch off mentally at 14, before leaving school physically at 16, which is why we have got one of the worst staying-on records in the world."
A source close to Mr Johnson later confirmed that the issue was being given active consideration within the education department.
It was said to be at an early stage, and legally complex.
On a visit to Canada in September, Mr Johnson had been impressed by the way a similar change is being effected in Ontario by a threat to stop youngsters having driving licences if they do not stay in school.
When Chancellor Gordon Brown was asked specifically about the issue while on an educational visit in Nottingham on Friday, he said young people needed qualifications in a post-industrial economy.
"Young people have got to get the qualifications that are necessary for the future," said Mr Brown.
But on the specific issue of compulsion, he said: "I think what we're talking about is part-time or full-time in college, in school or in the workplace, but with everybody having the chance to stay in education until they are 18."
A spokesman for the Department for Education and Skills said improving "staying on" rates was a "priority for this government".
"We have already stated our aspiration to increase participation at 17 to at least 90% by 2015 from our current level of around 75% and we want every 16 to 18 year old to take advantage of the range of education and training opportunities available to them.
"Through new diplomas and the expansion of apprenticeships, we want to make sure that every young person as the opportunity to pursue a learning programme that suits them post-16."
One of the main initiatives to improve "staying on" rates is the education maintenance allowance (EMA).
This gives means-tested payments of up to £30 a week to those who continue studying after 16.
Home educators point out that, while education is compulsory, schooling is not.
In the latter part of the 19th Century, compulsory attendance at school ceased to be a matter for local option. Children had to attend between the ages of five and 10 though with some local discretion such as early leaving in agricultural areas.
1893 - leaving age raised to 11
1899 - leaving age raised to 12
1918 - full-time education compulsory from 5 to 14, exemptions dropped
1936 - leaving age to be raised to 15 from 1939, not implemented because of the outbreak of war
1944 - legislation to enable raising leaving age to 15, and 16 "as soon as it was practicable"
1947 - leaving age raised to 15
1959 - report recommending leaving age of 16
1963 - another report recommended 16
1964 - preparations for change begin
1968 - change postponed
1971 - leaving age raised to 16 from September 1972
1997 - all children must remain in education until the last schoolday in June in the year they turn 16