On the cyclicality of schooling: Theory and evidence
AbstractEconomic 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 InfoPaper 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.
Date of creation: 01 Sep 1996
Date of revision:
Other versions of this item:
- Harris Dellas & Plutarchos Sakellaris, 2003. "On the cyclicality of schooling: theory and evidence," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 148-172, January.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-02-10 (All new papers)
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