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Return to a High School Diploma and the Decision to Drop Out: New Evidence from Canada

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  • Daniel Parent

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Abstract

The objective of this paper is to analyze the process by which young Canadians decide to leave high school and to situate it in the context of the value of a high school diploma over the 1981-1998 period, conditional on not pursuing post-secondary education. Evidence from the 1981-96 Canadian Censuses, the 1998 Canadian Labour Force Survey, and the 1981-1998 March Current Population Surveys shows that the wage premium to holding just a high school diploma in Canada is substantially lower than in the United States over the whole sample period and for all age groups. Turning to Statistics Canada's School Leavers Survey and its Follow-up, it is shown that high school graduates' labour market outcomes are essentially no better than those of dropouts, except perhaps in terms of employment rates. Finally, having established that the labour market value of holding just a high school diploma in Canada is rather low, I go back to the individuals' decision to leave school either as dropouts or graduates and find that they were very sensitive to the conditions of the local labour market. Those conditions affected their graduation decision through their impact on the probability of having a job in the twelve months preceding the date they left school either as graduates or as dropouts. Cette étude se penche sur le processus de transition de l'école vers le marché du travail et l'examine dans le contexte de l'évolution dans la valeur de détenir un diplôme d'études secondaires depuis 1981. Les principaux résultats découlant de l'analyse des données de recensement nous indiquent que bien que les diplômés du secondaire aient conservé un avantage en terme de taux d'emploi par rapport aux sortants depuis 1981, l'avantage salarial est demeuré beaucoup plus faible qu'aux États-Unis et ce, pour tous les groupes d'âge. Quant aux données du Suivi de l'Enquête sur les sortants, elles nous indiquent qu'il n'y a pas de différence majeure dans le processus de transition vers le marché du travail entre les sortants et les diplômés, outre le fait que les diplômés aient une probabilité plus grande d'avoir occupé un emploi à temps complet. Ayant établi que la valeur d'un diplôme d'études secondaires est substantiellement plus faible au Canada qu'aux États-Unis, la seconde étape de l'étude montre que le fait de diplômer ou non s'avère très sensible aux conditions économiques locales. Ces conditions opèrent par le biais de la probabilité d'avoir occupé un emploi dans les douzes mois précédant la fin des études secondaires, soit comme diplômé, soit comme sortant

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 2001s-09.

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Date of creation: 01 Feb 2001
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Handle: RePEc:cir:cirwor:2001s-09

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Keywords: High school non-completion; local labour market conditions; return to a high school diploma; Abandon scolaire; conditions économiques locales; rendement d'un diplôme d'études secondaires;

References

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  1. David Card & Thomas Lemieux, 1997. "Adapting to Circumstances: The Evolution of Work, School, and Living Arrangements Among North American Youth," Working Papers 765, Princeton University, Department of Economics, Industrial Relations Section..
  2. Ruhm, Christopher J, 1997. "Is High School Employment Consumption or Investment?," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 735-76, October.
  3. Cameron, Stephen V & Heckman, James J, 1993. "The Nonequivalence of High School Equivalents," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 1-47, January.
  4. Gerald S. Oettinger, 1999. "Does high school employment affect high school academic performance?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(1), pages 136-151, October.
  5. Richard B. Freeman & Karen Needels, 1993. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 45-68 National Bureau of Economic Research, Inc.
  6. Stephen V. Cameron & James J. Heckman, 1993. "Determinants of Young Male Schooling and Training Choices," NBER Working Papers 4327, National Bureau of Economic Research, Inc.
  7. Kevin M. Murphy & W. Craig Riddell & Paul M. Romer, 1998. "Wages, Skills, and Technology in the United States and Canada," NBER Working Papers 6638, National Bureau of Economic Research, Inc.
  8. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  9. Marcel Dagenais & Benoit Durocher & Claude Montmarquette & Daniel Parent & François Raymond, 1998. "Travail pendant les études et abandon scolaire : Causes, conséquences et politiques d'intervention," CIRANO Working Papers 98s-32, CIRANO.
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