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The Impact of Mass Layoffs on the Educational Investments of Working College Students

Author

Listed:
  • Ost, Ben

    () (University of Illinois at Chicago)

  • Pan, Weixiang

    (University of Illinois at Chicago)

  • Webber, Douglas A.

    () (Temple University)

Abstract

Analyzing how working students weather personal economic shocks is increasingly important as the fraction of college students working substantial hours has increased dramatically over the past few decades. Using administrative data on Ohio college students linked to matched firm-worker data on earnings, we examine how layoff affects the educational outcomes of working college students. Theoretically, layoff decreases the opportunity cost of college enrollment, but it could also make financing one's education more difficult, so the net effect is ambiguous. We find that layoff leads to a considerable reduction in the probability of employment while in school, but it has little impact on enrollment decisions at the extensive margin. On the intensive margin, we find that layoff leads to an increase in enrolled credits, consistent with the fact that the opportunity cost of college has decreased.

Suggested Citation

  • Ost, Ben & Pan, Weixiang & Webber, Douglas A., 2016. "The Impact of Mass Layoffs on the Educational Investments of Working College Students," IZA Discussion Papers 10078, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10078
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    More about this item

    Keywords

    layoff; educational investment; working students;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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