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On the cyclicality of schooling: Theory and evidence

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  • Dellas, Harris

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Sakellaris, Plutarchos

    (University of Maryland)

Abstract

Economic theory indicates that opportunity-cost considerations tend to make schooling countercyclical whereas ability-to-pay considerations have the opposite effect. We examine the college enrollment decisions of individuals using the Current Population Survey and find that their propensity to enroll is countercyclical. There seems to be significant substitution during the business cycle between human capital investment and competing economic activities. The decision to enroll in college is related strongly to labor market conditions (measured by the state-level unemployment rate and earnings) and to the real interest rate. Furthermore, there are significant differences across demographic groups.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 1997002.

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Length: 45
Date of creation: 01 Sep 1996
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Handle: RePEc:ctl:louvir:1997002

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