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The Causal Effects of Education on Adaptability

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Author Info

  • Riddell, W. Craig
  • Song, Xueda

Abstract

This study investigates the causal effects of education on individuals’ adaptability to employment shocks. Specifically, we assess the extent to which education influences re-employment success for unemployed workers. We also examine the impact of education on job search intensity, one potential mechanism through which education may increase the probability of re-employment following unemployment. Given that the positive correlation between education and adaptability is likely to be confounded by the endogeneity of education, we make use of data on compulsory schooling laws to create instrumental variables to assess the causal effects of education on adaptability. Based on data from the Canadian Census and the Labour Force Survey, we find that education both significantly improves re-employment opportunities and exerts significant positive impacts on job search intensity for the unemployed.

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File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%208%20-%20Riddell%20&%20Song.pdf
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Bibliographic Info

Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2009-15.

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Length: 46 pages
Date of creation: 16 Feb 2009
Date of revision: 16 Feb 2009
Handle: RePEc:ubc:clssrn:clsrn_admin-2009-15

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Web page: http://www.clsrn.econ.ubc.ca/

Related research

Keywords: Education; Human Capital; Adaptability; Displaced Workers; Unemployment; Job Search; Casual Effects; Compulsory Schooling Laws;

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References

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  1. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  2. Jacob Mincer, 1991. "Education and Unemployment," NBER Working Papers 3838, National Bureau of Economic Research, Inc.
  3. Stephen R. G. Jones & W. Craig Riddell, . "The Measurement Of Unemployment: An Empirical Approach," Canadian International Labour Network Working Papers 09, McMaster University.
  4. Thomas J. Kane & Cecilia Elena Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," NBER Working Papers 7235, National Bureau of Economic Research, Inc.
  5. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-60, September.
  6. Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-66, September.
  7. Ana M. Ferrer & W. Craig Riddell, 2002. "The role of credentials in the Canadian labour market," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 879-905, November.
  8. Stephen R. G. Jones & W. Craig Riddell, 2006. "Unemployment and Nonemployment: Heterogeneities in Labor Market States," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 314-323, May.
  9. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
  10. Milligan, Kevin & Moretti, Enrico & Oreopoulos, Philip, 2004. "Does education improve citizenship? Evidence from the United States and the United Kingdom," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1667-1695, August.
  11. Claudia Goldin & Lawrence Katz, 2003. "Mass Secondary Schooling and the State," NBER Working Papers 10075, National Bureau of Economic Research, Inc.
  12. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
  13. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
  14. Yoon, Bong Joon, 1981. "A Model of Unemployment Duration with Variable Search Intensity," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 599-609, November.
  15. Michael Grossman, 2005. "Education and Nonmarket Outcomes," NBER Working Papers 11582, National Bureau of Economic Research, Inc.
  16. Bekker, Paul A, 1994. "Alternative Approximations to the Distributions of Instrumental Variable Estimators," Econometrica, Econometric Society, vol. 62(3), pages 657-81, May.
  17. Philip Oreopoulos, 2003. "Do Dropouts Drop Out Too Soon? International Evidence From Changes in School-Leaving Laws," NBER Working Papers 10155, National Bureau of Economic Research, Inc.
  18. John M. Barron & Wesley Mellow, 1979. "Search Effort in the Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 389-404.
  19. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
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Citations

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Cited by:
  1. Philip Oreopoulos & Kjell G. Salvanes, 2011. "Priceless: The Nonpecuniary Benefits of Schooling," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 159-84, Winter.
  2. Riddell, W. Craig, 2009. "Economic Change and Worker Displacement in Canada: Consequences and Policy Responses," CLSSRN working papers clsrn_admin-2009-41, Vancouver School of Economics, revised 22 Jul 2009.
  3. 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.

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