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High school completion and future youth unemployment: new evidence from High School and Beyond

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  • Mingliang Li

    (Department of Economics, State University of New York at Buffalo, USA)

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    Abstract

    In this paper, I provide new evidence from High School and Beyond (HSB) on the effects of compulsory attendance on high school completion and future youth unemployment. I develop Bayesian estimation approaches to the simultaneous equation model with ordered probit and two-limit censored regression and the bivariate duration model, accounting for the heterogeneity in returns to education and the nonlinearity in the effects of compulsory attendance. I find substantial variability in returns to education across schools and evidence of diminishing marginal effects of compulsory attendance on high school completion. The simulation results suggest that increasing the compulsory attendance age raises the probability of completing high school and reduces the proportion of time the individuals are unemployed. These effects are much more pronounced for disadvantaged students but less pronounced for advantaged students, suggesting the potential effects of compulsory attendance on reducing the inequality in education and employment. Copyright © 2005 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/jae.817
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    File URL: http://qed.econ.queensu.ca:80/jae/2006-v21.1/
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

    Volume (Year): 21 (2006)
    Issue (Month): 1 ()
    Pages: 23-53

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    Handle: RePEc:jae:japmet:v:21:y:2006:i:1:p:23-53

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    References

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    1. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-56, July.
    2. Joshua Angrist & Alan Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," Working Papers 653, Princeton University, Department of Economics, Industrial Relations Section..
    3. Gorgens, Tue & Horowitz, Joel L., 1999. "Semiparametric estimation of a censored regression model with an unknown transformation of the dependent variable," Journal of Econometrics, Elsevier, vol. 90(2), pages 155-191, June.
    4. Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
    5. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
    6. Grogger, Jeff, 1996. "School Expenditures and Post-schooling Earnings: Evidence from High School and Beyond," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 628-37, November.
    7. Ganderton, Philip T., 1992. "The effect of subsidies in kind on the choice of a college," Journal of Public Economics, Elsevier, vol. 48(3), pages 269-292, August.
    8. Lillard, Lee A., 1993. "Simultaneous equations for hazards : Marriage duration and fertility timing," Journal of Econometrics, Elsevier, vol. 56(1-2), pages 189-217, March.
    9. Daron Acemoglu & Joshua Angrist, 2001. "How Large are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 9-74 National Bureau of Economic Research, Inc.
    10. Michael P. Keane & Kenneth I. Wolpin, 1994. "The solution and estimation of discrete choice dynamic programming models by simulation and interpolation: Monte Carlo evidence," Staff Report 181, Federal Reserve Bank of Minneapolis.
    11. Lance Lochner & Enrico Moretti, 2001. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports," NBER Working Papers 8605, National Bureau of Economic Research, Inc.
    12. Campolieti, Michele, 1997. "Bayesian Estimation of Duration Models: An Application of the Multiperiod Probit Model," Empirical Economics, Springer, vol. 22(3), pages 461-80.
    13. Nobile, Agostino, 2000. "Comment: Bayesian multinomial probit models with a normalization constraint," Journal of Econometrics, Elsevier, vol. 99(2), pages 335-345, December.
    14. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, vol. 67(6), pages 1295-1340, November.
    15. Lang, Kevin & Kropp, David, 1986. "Human Capital versus Sorting: The Effects of Compulsory Attendance Laws," The Quarterly Journal of Economics, MIT Press, vol. 101(3), pages 609-24, August.
    16. Kenneth I. Wolpin & Mark R. Rosenzweig, 2000. "Natural "Natural Experiments" in Economics," Journal of Economic Literature, American Economic Association, vol. 38(4), pages 827-874, December.
    17. Michele Campolieti, 2001. "Bayesian semiparametric estimation of discrete duration models: an application of the dirichlet process prior," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(1), pages 1-22.
    18. Eric A. Hanushek & Lori L. Taylor, 1990. "Alternative Assessments of the Performance of Schools: Measurement of State Variations in Achievement," Journal of Human Resources, University of Wisconsin Press, vol. 25(2), pages 179-201.
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    Cited by:
    1. Li, Mingliang, 2009. "Is there "white flight" into private schools? New evidence from High School and Beyond," Economics of Education Review, Elsevier, vol. 28(3), pages 382-392, June.
    2. Philip Oreopoulos & Kjell G. Salvanes, 2011. "Priceless: The Nonpecuniary Benefits of Schooling," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 159-84, Winter.
    3. Li, Mingliang & Tobias, Justin L., 2011. "Bayesian inference in a correlated random coefficients model: Modeling causal effect heterogeneity with an application to heterogeneous returns to schooling," Journal of Econometrics, Elsevier, vol. 162(2), pages 345-361, June.
    4. Rainer Winkelmann, 2009. "Copula-based bivariate binary response models," SOI - Working Papers 0913, Socioeconomic Institute - University of Zurich.
    5. Anderson, D. Mark & Hansen, Benjamin & Walker, Mary Beth, 2013. "The minimum dropout age and student victimization," Economics of Education Review, Elsevier, vol. 35(C), pages 66-74.
    6. Philip Oreopoulos & Kjell G. Salvanes, 2009. "How large are returns to schooling? Hint: Money isn't everything," NBER Working Papers 15339, National Bureau of Economic Research, Inc.

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