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Time-to-Degree and the Business Cycle

Author

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  • Messer, Dolores

    (University of Bern)

  • Wolter, Stefan C.

    (University of Bern)

Abstract

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 of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp2787
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    1. Pietro Garibaldi & Francesco Giavazzi & Andrea Ichino & Enrico Rettore, 2012. "College Cost and Time to Complete a Degree: Evidence from Tuition Discontinuities," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 699-711, August.
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    6. Messer, Dolores & Wolter, Stefan C., 2005. "Are Student Exchange Programs Worth It?," IZA Discussion Papers 1656, Institute of Labor Economics (IZA).
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    9. Ronald G. Ehrenberg & Panagiotis G. Mavros, 1995. "Do Doctoral Students' Financial Support Patterns Affect Their Times-To-Degree and Completion Probabilities?," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 581-609.
    10. Charlotte Lauer, 2002. "Participation in higher education," International Journal of Manpower, Emerald Group Publishing Limited, vol. 23(5), pages 443-457, August.
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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. Maria Apostolova‐Mihaylova & Aaron Yelowitz, 2018. "Health Insurance, Fertility, And The Wantedness Of Pregnancies: Evidence From Massachusetts," Contemporary Economic Policy, Western Economic Association International, vol. 36(1), pages 59-72, January.
    3. Graves, Jennifer & Kuehn, Zoë, 2021. "Specializing in growing sectors: Wage returns and gender differences," Labour Economics, Elsevier, vol. 70(C).
    4. Bradley, Elizabeth S., 2012. "The Effect of the Business Cycle on Freshman Major Choice," MPRA Paper 42412, University Library of Munich, Germany.
    5. Denzler, Stefan & Wolter, Stefan C., 2011. "Too Far to Go? Does Distance Determine Study Choices?," IZA Discussion Papers 5712, Institute of Labor Economics (IZA).
    6. 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.
    7. Elizabeth B. Clelan & Michael S. Kofoed, 2017. "The Effect Of The Business Cycle On Freshman Financial Aid," Contemporary Economic Policy, Western Economic Association International, vol. 35(2), pages 253-268, April.
    8. 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.
    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.
    11. Jennifer Graves & Zoë Kuehn, 2022. "Higher education decisions and macroeconomic conditions at age eighteen," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 13(1), pages 171-241, May.

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    More about this item

    Keywords

    consumption benefit; time-to-degree; business cycle;
    All these keywords.

    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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