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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 labour supply shock on the earnings of young high-school graduates. The abolition of Ontario's Grade 13 generated a very large cohort of high-school graduates that simultaneously entered the Ontario labour market, generating a sudden increase in the labour 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%. The findings from the Census are supported by the LFS results that suggest that the immediate impact of the supply shock—measured about six months after high-school graduation—is also important.

Suggested Citation

  • Morin, Louis-Philippe, 2015. "Cohort size and youth earnings: Evidence from a quasi-experiment," Labour Economics, Elsevier, vol. 32(C), pages 99-111.
  • Handle: RePEc:eee:labeco:v:32:y:2015:i:c:p:99-111
    DOI: 10.1016/j.labeco.2015.01.001
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    Cited by:

    1. John Moffat & Duncan Roth, 2016. "The Cohort Size-Wage Relationship in Europe," LABOUR, CEIS, vol. 30(4), pages 415-432, December.
    2. Mathias Huebener & Jan Marcus, 2015. "Moving up a Gear: The Impact of Compressing Instructional Time into Fewer Years of Schooling," Discussion Papers of DIW Berlin 1450, DIW Berlin, German Institute for Economic Research.
    3. repec:spr:jlabrs:v:50:y:2017:i:1:d:10.1007_s12651-017-0227-3 is not listed on IDEAS
    4. Bryson, Alex & Gomez, Rafael & Zhang, Tingting, 2014. "All-Star or Benchwarmer? Relative Age, Cohort Size and Career Success in the NHL," IZA Discussion Papers 8645, Institute for the Study of Labor (IZA).
    5. Newhouse, David & Wolff, Claudia, 2014. "Cohort Size and Youth Employment Outcomes," IZA Discussion Papers 8197, Institute for the Study of Labor (IZA).
    6. Stephan L. Thomsen, 2015. "The impacts of shortening secondary school duration," IZA World of Labor, Institute for the Study of Labor (IZA), pages 166-166, July.
    7. repec:zbw:espost:162940 is not listed on IDEAS
    8. Peters, Cornelius, 2015. "Do age complementarities affect labour productivity? Evidence from German firm level data," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112941, Verein für Socialpolitik / German Economic Association.
    9. repec:eee:ecoedu:v:58:y:2017:i:c:p:1-14 is not listed on IDEAS
    10. Clémentine Garrouste & Mathilde Godard, 2015. "The Lasting Health Impact of Leaving School in a Bad Economy: Britons in the 1970s Recession," Working Papers halshs-01521916, HAL.

    More about this item

    Keywords

    Labour supply shock; Youth;

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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