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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 16Â years of schooling. Evidence on the impact of formal schooling on unemployment incidence is mixed.

Suggested Citation

  • Riddell, W. Craig & Song, Xueda, 2011. "The impact of education on unemployment incidence and re-employment success: Evidence from the U.S. labour market," Labour Economics, Elsevier, vol. 18(4), pages 453-463, August.
    • Handle: RePEc:eee:labeco:v:18:y:2011:i:4:p:453-463
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    More about this item

    Keywords

    Education Labour market transitions Unemployment Causal effects Compulsory schooling laws Child labour laws Vietnam War draft;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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