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The Effects of Macroeconomic Conditions on the Education and Employment Outcomes of Youth

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  • Nicolas Herault

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Weiping Kostenko

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Gary Marks

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Rezida Zakirova

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

This paper examines the impact of macroeconomic conditions on the education and employment outcomes of youths in school-to-work transition. The dataset is based on five different cohorts from the Youth in Transition surveys (YIT) and the Longitudinal Surveys of Australian Youth (LSAY) and covers the period from 1985 to 2006, which is long enough to control explicitly for both poor and positive macroeconomic conditions. The multivariate analyses show that both the unemployment rates, and to a lesser extent economic growth rates, have an impact on youths' education and employment outcomes. Although the effects vary significantly by gender an education level, overall the results reveal that poor macroeconomic conditions tend to drive young people out of full-time work and into inactivity or part-time work. In addition, poor macroeconomic conditions tend to discourage further education. A result worth noticing is that males who did not complete secondary school suffer the largest increase in unemployment risks as the unemployment rate increases.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2010n02.

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Length: 30 pages
Date of creation: Mar 2010
Date of revision:
Handle: RePEc:iae:iaewps:wp2010n02

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