School failure is substantive in Spain. The percentage of students that do not achieve the compulsory education diploma is around 20%. School failure is higher for students from lower socio-economic backgrounds. Students who "fail" cannot continue to post-compulsory education and, sooner or later, they have to leave formal education. The evolution of school failure in Spain follows a U-shaped curve that decreases from the seventies and rises from the end of the past century. This article explores the evolution of the impact of students' socio-economic backgrounds on school failure from the seventies onwards and tests whether this impact increased at the end of last century. Using logit models of estimation to control for socio-demographic factors, we demonstrate that students from higher socio-economic backgrounds show fewer fluctuations in school failure than students from lower socio-economic backgrounds. We also provide evidence in support of an increase in the impact of socio-economic background on school failure from the end of the past century, thereby increasing differences by social origin of students. Our paper is consistent with previous literature showing that the impact of socio-economic background on school failure from the seventies onwards is declining. Nevertheless, we show an increase in this impact from the late nineties not described before. We offer a possible explanation for this upward trend in the shape of change in the institutional structure of the education system, although labour market incentives may also have played a role.