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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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  • Riddell, W. Craig
  • Song, Xueda

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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File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2080%20-%20Riddell%20and%20Song.pdf
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Bibliographic Info

Paper provided by UBC Department of Economics in its series CLSRN Working Papers with number clsrn_admin-2011-18.

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Length: 37 pages
Date of creation: 27 Jul 2011
Date of revision: 27 Jul 2011
Handle: RePEc:ubc:clssrn:clsrn_admin-2011-18

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

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References

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  22. Jacob Mincer, 1991. "Education and Unemployment of Women," NBER Working Papers 3837, National Bureau of Economic Research, Inc.
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  24. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805 Elsevier.
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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," CLSRN Working Papers clsrn_admin-2011-31, UBC Department of Economics, revised 22 Dec 2011.

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