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Young people, human capital investment and the Great Recession

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  • Chiara Cavaglia
  • Sandra McNally

Abstract

Policy makers recognise the importance of encouraging young people to stay in education for longer. We use the experience of the Great Recession in England to evaluate whether the incentive to invest in human capital bears fruit in terms of educational achievement and future labour market outcomes. We compare those on the cusp of their post-compulsory education to those who had already passed that point in their lives before the recession arrived. We also use variation in the severity of the Great Recession across different areas to identify effects. Our results suggest an effect on enrolment that translates into higher levels of achievement, which is driven by an increase in vocational qualifications. We also show that younger cohorts fare well relative to later cohorts in terms of early labour market outcomes.

Suggested Citation

  • Chiara Cavaglia & Sandra McNally, 2025. "Young people, human capital investment and the Great Recession," CVER Research Papers 042, Centre for Vocational Education Research.
    • Handle: RePEc:cep:cverdp:042
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