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The Impact of Education on Unemployment Incidence and Re-employment Success: Evidence from the U.S. Labour Market

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Author Info

  • Riddell, W. Craig

    ()
    (University of British Columbia, Vancouver)

  • Song, Xueda

    ()
    (York University, Canada)

Abstract

This study investigates the causal effects of education on individuals’ transitions between employment and unemployment, with particular focus on the extent to which education improves re-employment outcomes among unemployed workers. Given that positive correlations between education and labour force transitions are likely to be confounded by the endogeneity of education, we make use of data on compulsory schooling laws and child labour laws as well as conscription risk in the Vietnam War period to create instrumental variables to identify the causal relationships. Results indicate that education significantly increases re-employment rates of the unemployed. Particularly large impacts are found in the neighborhoods of 12 and 16 years of schooling. Evidence on the impact of formal schooling on unemployment incidence is mixed.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5572.

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Length: 37 pages
Date of creation: Mar 2011
Date of revision:
Publication status: published in: Labour Economics, 2011, 18 (4), 453-463
Handle: RePEc:iza:izadps:dp5572

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Keywords: child labour laws; compulsory schooling laws; causal effects; unemployment; labour market transitions; education; Vietnam War draft;

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References

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Citations

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Cited by:
  1. Marc van der Steeg & Roel van Elk & Dinand Webbink, 2012. "Does intensive coaching reduce school dropout?," CPB Discussion Paper 224, CPB Netherlands Bureau for Economic Policy Analysis.
  2. Riddell, W. Craig, 2011. "Unemployment Compensation and Adjustment Assistance for Displaced Workers: Policy Options for Canada," CLSSRN working papers clsrn_admin-2011-31, Vancouver School of Economics, revised 22 Dec 2011.
  3. Donna Feir, 2013. "The Long Term Effects of Forcible Assimilation Policy: The Case of Indian Boarding Schools," Department Discussion Papers 1301, Department of Economics, University of Victoria.
  4. Deniz Gevrek & Z. Eylem Gevrek & Cahit Guven, 2013. "Benefits of Education at the Intensive Margin: Childhood Academic Performance and Adult Outcomes among American Immigrants," Working Paper Series of the Department of Economics, University of Konstanz 2013-11, Department of Economics, University of Konstanz.
  5. Conefrey, Thomas & McCarthy, Yvonne & Sherman, Martina, 2013. "Re-employment Probabilities for Unemployed Workers in Ireland," Economic Letters 06/EL/13, Central Bank of Ireland.
  6. Xinxiang Chen & Guangqing Chi, 2012. "Natural Beauty, Money, and the Distribution of Talent: A Local-Level Panel Data Analysis," Population Research and Policy Review, Springer, vol. 31(5), pages 665-681, October.

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