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Going Back to School Takes Time: Evidence from a Negative Trade Shock

Author

Listed:
  • Jean-Denis Garon

    (Department of Economics, University of Quebec in Montreal)

  • Catherine Haeck

    (Department of Economics, University of Quebec in Montreal)

  • Simon Bourassa-Viau

    (Statistics Canada)

Abstract

We estimate the impact of a negative trade shock on labour market outcomes and educational choices of workers. We exploit the Canadian lumber exports crisis beginning in 2007 in a quasi-experimental design. We find that the employment probability of forestry industry workers decreased by 4.1 percentage points following the crisis relative to other workers in comparable industries. While one would expect younger forestry workers to return to school in such circumstances, we find that in the first two years following the crisis, unemployed workers did not go back to school. But going back to school takes time, and after 3 to 4 years, we find that education enrollment increases by 2.5 percentage points (p=0.083). This confirms the idea that adjustments towards an increase in education enrollment are gradual, as it is easier to drop out than to enroll. In time of crisis, facilitating a return to education might be a valuable policy intervention.

Suggested Citation

  • Jean-Denis Garon & Catherine Haeck & Simon Bourassa-Viau, 2020. "Going Back to School Takes Time: Evidence from a Negative Trade Shock," Working Papers 20-01, Research Group on Human Capital, University of Quebec in Montreal's School of Management.
  • Handle: RePEc:grc:wpaper:20-01
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    References listed on IDEAS

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    More about this item

    Keywords

    education; labor demand shocks; youth; employment; unemployment;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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