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Parental Job Loss, Income Shocks and the Education Enrolment of Youth

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  • Michael B Coelli

Abstract

Parental job loss from layoffs and business failures that occur when youth complete high school completion are found to be negatively correlated with enrolment at university and community college. Estimates from a year-to-year education transition model using longitudinal data on youth and their parents are employed to identify both immediate and lagged effects of parental job loss on education transitions. It is argued that these results can be interpreted as evidence of a potential causal effect of parental income on youth education attainment, as job losses are likely to have persistent and exogenous negative effects on parental income.

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File URL: http://fbe.unimelb.edu.au/__data/assets/pdf_file/0015/801123/1060.pdf
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Bibliographic Info

Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 1060.

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Length: 40 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:mlb:wpaper:1060

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Postal: Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia
Phone: +61 3 8344 5355
Fax: +61 3 8344 6899
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Web page: http://www.economics.unimelb.edu.au
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Related research

Keywords: Education; human capital; job loss; income shocks; causal effect;

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References

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  1. Jo Blanden & Paul Gregg, 2004. "Family income and educational attainment: a review of approaches and evidence for Britain," LSE Research Online Documents on Economics 19461, London School of Economics and Political Science, LSE Library.
  2. Jo Blanden, 2004. "Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain," Oxford Review of Economic Policy, Oxford University Press, vol. 20(2), pages 245-263, Summer.
  3. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
  4. Stevens, Ann Huff, 1997. "Persistent Effects of Job Displacement: The Importance of Multiple Job Losses," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 165-88, January.
  5. John Shea, 1997. "Does Parents' Money Matter?," NBER Working Papers 6026, National Bureau of Economic Research, Inc.
  6. Bratberg, Espen & Nilsen, Øivind Anti & Vaage, Kjell, 2007. "Job losses and child outcomes," Working Papers in Economics 07/07, University of Bergen, Department of Economics.
  7. David M. Blau, 1999. "The Effect Of Income On Child Development," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 261-276, May.
  8. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
  9. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
  10. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
  11. Ann Huff Stevens & Marianne Page & Philip Oreopoulos, 2005. "The Intergenerational Effects of Worker Displacement," Working Papers 521, University of California, Davis, Department of Economics.
  12. Dan Maurice Levy & Greg Duncan, 2000. "Using Sibling Samples to Assess the Effect of Childhood Family Income on Completed Schooling," JCPR Working Papers 168, Northwestern University/University of Chicago Joint Center for Poverty Research.
  13. Frenette, Marc, 2003. "Access to College and University: Does Distance Matter?," Analytical Studies Branch Research Paper Series 2003201e, Statistics Canada, Analytical Studies Branch.
  14. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
  15. Paul Beaudry & Thomas Lemieux & Daniel Parent, 1999. "What Is Happening in the Youth Labour Market in Canada?," CIRANO Working Papers 99s-44, CIRANO.
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Citations

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Cited by:
  1. Coelli, Michael B., 2011. "Parental job loss and the education enrollment of youth," Labour Economics, Elsevier, vol. 18(1), pages 25-35, January.
  2. Foley, Kelly & Gallipoli, Giovanni & Green, David A., 2010. "Ability, Parental Valuation of Education and the High School Dropout Decision," CLSSRN working papers clsrn_admin-2010-14, Vancouver School of Economics, revised 30 Apr 2010.
  3. Louis N. Christofides & Michael Hoy & Ling Yang, 2008. "The Determinants of University Participation in Canada (1977-2003)," University of Cyprus Working Papers in Economics 4-2008, University of Cyprus Department of Economics.
  4. Louis N. Christofides & Michael Hoy & Ling Yang, 2006. "The Determinants of University Participation," Working Papers 0608, University of Guelph, Department of Economics and Finance.
  5. Marianne Page & Ann Huff Stevens & Jason Lindo, 2007. "Parental Income Shocks and Outcomes of Disadvantaged Youth in the United States," NBER Chapters, in: The Problems of Disadvantaged Youth: An Economic Perspective, pages 213-235 National Bureau of Economic Research, Inc.
  6. 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.
  7. Frenette, Marc, 2007. "Est-ce que les universites profitent a la population locale de jeunes? Resultats provenant de la frequentation des universites et des colleges, et des gains des diplomes suivant la creation d'une nouv," Direction des etudes analytiques : documents de recherche 2006283f, Statistics Canada, Direction des etudes analytiques.

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