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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.

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  • 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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    3. Clémentine Garrouste & Mathilde Godard, 2016. "The lasting health impact of leaving school in a bad economy : Britons in the 1970s recession," Post-Print hal-01408637, HAL.
    4. Newhouse, David & Wolff, Claudia, 2014. "Cohort Size and Youth Employment Outcomes," IZA Discussion Papers 8197, Institute of Labor Economics (IZA).
    5. Dorner, Matthias & Görlitz, Katja, 2020. "Training, Wages and a Missing School Graduation Cohort," IZA Discussion Papers 13490, Institute of Labor Economics (IZA).
    6. Alex Bryson, 2014. "All-Star or Benchwarmer? Relative Age, Cohort Size and Career Success in the NHL," National Institute of Economic and Social Research (NIESR) Discussion Papers 441, National Institute of Economic and Social Research.
    7. Stephan L. Thomsen, 2015. "The impacts of shortening secondary school duration," IZA World of Labor, Institute of Labor Economics (IZA), pages 166-166, July.
    8. John Moffat & Duncan Roth, 2016. "The Cohort Size-Wage Relationship in Europe," LABOUR, CEIS, vol. 30(4), pages 415-432, December.
    9. Peters, Cornelius, 2015. "Do age complementarities affect labour productivity? Evidence from German firm level data," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112941, Verein für Socialpolitik / German Economic Association.
    10. David Neumark & Maysen Yen, 2020. "Relative Sizes of Age Cohorts and Labor Force Participation of Older Workers," Demography, Springer;Population Association of America (PAA), vol. 57(1), pages 1-31, February.
    11. 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.
    12. Clementine Garrouste & Mathilde Godard, 2016. "The Lasting Health Impact of Leaving School in a Bad Economy: Britons in the 1970s Recession," Health Economics, John Wiley & Sons, Ltd., vol. 25(S2), pages 70-92, November.
    13. Yan Lau, 2019. "The dragon cohort of Hong Kong: traditional beliefs, demographics, and education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(1), pages 219-246, January.
    14. Dorner, Matthias & Görlitz, Katja, 2020. "Training, wages and a missing school graduation cohort," Ruhr Economic Papers 858, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

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    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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