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Time-to-Degree and the Business Cycle


  • Messer, Dolores

    () (University of Bern)

  • Wolter, Stefan C.

    () (University of Bern)


When students themselves enjoy large degrees of freedom in determining the duration of their studies, it results in a fairly large degree of interindividual variance in terms of time-to-degree. This paper investigates individual time-to-degree in a model where students determine the optimum time-to-degree whilst weighing up the cost against the consumption benefit accruing from an additional semester of studies. According to this model, the cost level and consumption benefit depend, in turn, on the general economic environment during the study period. An empirical investigation using a data set based on Swiss university graduates from 1981 to 2001 shows that changes in the unemployment rate, real interest rate, wage levels, and economic growth have a significant impact on individual time-to-degree. These results are consistent with the conclusions derived from the theoretical model.

Suggested Citation

  • Messer, Dolores & Wolter, Stefan C., 2007. "Time-to-Degree and the Business Cycle," IZA Discussion Papers 2787, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2787

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    References listed on IDEAS

    1. Brunello, Giorgio & Winter-Ebmer, Rudolf, 2003. "Why do students expect to stay longer in college? Evidence from Europe," Economics Letters, Elsevier, vol. 80(2), pages 247-253, August.
    2. Messer, Dolores & Wolter, Stefan C., 2005. "Are Student Exchange Programs Worth It?," IZA Discussion Papers 1656, Institute for the Study of Labor (IZA).
    3. Harris Dellas & Plutarchos Sakellaris, 2003. "On the cyclicality of schooling: theory and evidence," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 148-172, January.
    4. Dellas, Harris & Koubi, Vally, 2003. "Business cycles and schooling," European Journal of Political Economy, Elsevier, vol. 19(4), pages 843-859, November.
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    Cited by:

    1. Kristine Simson, 2015. "Explaining upper secondary school dropout: new evidence on the role of local labor markets," Empirical Economics, Springer, vol. 48(4), pages 1419-1444, June.
    2. repec:bla:coecpo:v:36:y:2018:i:1:p:59-72 is not listed on IDEAS
    3. Bradley, Elizabeth S., 2012. "The Effect of the Business Cycle on Freshman Major Choice," MPRA Paper 42412, University Library of Munich, Germany.
    4. Denzler, Stefan & Wolter, Stefan C., 2011. "Too Far to Go? Does Distance Determine Study Choices?," IZA Discussion Papers 5712, Institute for the Study of Labor (IZA).
    5. Carmen Aina & Eliana Baici & Giorgia Casalone, 2010. "Time-to-Degree: Students' Abilities, University Characteristics or What Else? Evidence from Italy," Working Papers 130, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    6. repec:bla:coecpo:v:35:y:2017:i:2:p:253-268 is not listed on IDEAS
    7. Gitto, Lara & Minervini, Leo Fulvio & Monaco, Luisa, 2012. "University dropouts: supply-side issues in Italy," MPRA Paper 56656, University Library of Munich, Germany, revised Nov 2013.
    8. Mathilde Gaini & Aude Leduc & Augustin Vicard, 2013. "School as a Shelter? School Leaving-Age and the Business Cycle in France," Annals of Economics and Statistics, GENES, issue 111-112, pages 251-270.
    9. Hofmann, Barbara & Hohmeyer, Katrin, 2016. "The effect of the business cycle at college graduation on fertility," Economics of Education Review, Elsevier, vol. 55(C), pages 88-102.
    10. Jeffrey A. Groen, 2016. "The Impact of Labor Demand on Time to the Doctorate," Education Finance and Policy, MIT Press, vol. 11(1), pages 43-69, Winter.

    More about this item


    consumption benefit; time-to-degree; business cycle;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I2 - Health, Education, and Welfare - - Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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