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Cohort Size and Youth Earnings: Evidence from a Quasi-Experiment

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  • Morin, Louis-Philippe

Abstract

In this paper, I use data from the Canadian Labour Force Surveys (LFS), and the 2001 and 2006 Canadian Censuses to estimate the impact of an important labor supply shock on the earnings of young high-school graduates. The abolition of Ontario’s Grade 13 generated a ‘double’ cohort of high-school graduates that simultaneously entered the Ontario labor market, generating a large and sudden increase in the labor supply. This provides a rare occasion to measure the impact of cohort size on earnings without the supply shock being possibly confounded with unobserved trends—a recurring problem in the literature. The Census findings suggest that the effect of the supply shock is statistically and economically important, depressing weekly earnings by 5 to 9 percent. The findings from Census are supported by the LFS results which suggest that the immediate impact of the supply shock—measured about six months after high-school graduation—is also important.

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Bibliographic Info

Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2011-28.

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Length: 33 pages
Date of creation: 28 Nov 2011
Date of revision: 28 Nov 2011
Handle: RePEc:ubc:clssrn:clsrn_admin-2011-28

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

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Keywords: Labor Supply Shock; Youth;

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References

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  1. Adriana Kugler & Mutlu Yuksel, 2008. "Effects of Low-Skilled Immigration on U.S. Natives: Evidence from Hurricane Mitch," CReAM Discussion Paper Series 0809, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  2. Louis-Philippe Morin, 2010. "Estimating the Benefit of High School for College-Bound Students," Working Papers 1002E, University of Ottawa, Department of Economics.
  3. Harry Krashinsky, 2014. "How Would One Extra Year of High School Affect Academic Performance in University? Evidence from an Educational Policy Change," Canadian Journal of Economics, Canadian Economics Association, vol. 47(1), pages 70-97, February.
  4. Leah Platt Boustan & Price V. Fishback & Shawn E. Kantor, 2007. "The Effect of Internal Migration on Local Labor Markets: American Cities During the Great Depression," NBER Working Papers 13276, National Bureau of Economic Research, Inc.
  5. Sanders Korenman & David Neumark, 2000. "Cohort Crowding and Youth Labor Markets (A Cross-National Analysis)," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 57-106 National Bureau of Economic Research, Inc.
  6. Diane J. Macunovich, 1999. "The fortunes of one's birth: Relative cohort size and the youth labor market in the United States," Journal of Population Economics, Springer, vol. 12(2), pages 215-272.
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Cited by:
  1. Newhouse, David & Wolff, Claudia, 2014. "Cohort Size and Youth Employment Outcomes," IZA Discussion Papers 8197, Institute for the Study of Labor (IZA).

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