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Parental Job Loss, Income Shocks and the Education Enrolment of Youth


  • Michael B Coelli


Parental job loss from layoffs and business failures that occur when youth complete high school completion are found to be negatively correlated with enrolment at university and community college. Estimates from a year-to-year education transition model using longitudinal data on youth and their parents are employed to identify both immediate and lagged effects of parental job loss on education transitions. It is argued that these results can be interpreted as evidence of a potential causal effect of parental income on youth education attainment, as job losses are likely to have persistent and exogenous negative effects on parental income.

Suggested Citation

  • Michael B Coelli, 2009. "Parental Job Loss, Income Shocks and the Education Enrolment of Youth," Department of Economics - Working Papers Series 1060, The University of Melbourne.
  • Handle: RePEc:mlb:wpaper:1060

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    Cited by:

    1. Marianne Page & Ann Huff Stevens & Jason Lindo, 2007. "Parental Income Shocks and Outcomes of Disadvantaged Youth in the United States," NBER Chapters,in: The Problems of Disadvantaged Youth: An Economic Perspective, pages 213-235 National Bureau of Economic Research, Inc.
    2. Christofides, Louis N. & Hoy, Michael & Yang, Ling, 2008. "The Determinants of University Participation in Canada (1977−2003)," IZA Discussion Papers 3805, Institute for the Study of Labor (IZA).
    3. Louis N. Christofides & Michael Hoy & Ling Yang, 2006. "The Determinants of University Participation," Working Papers 0608, University of Guelph, Department of Economics and Finance.
    4. Coelli, Michael B., 2011. "Parental job loss and the education enrollment of youth," Labour Economics, Elsevier, vol. 18(1), pages 25-35, January.
    5. Philip Oreopoulos & Marianne Page & Ann Huff Stevens, 2008. "The Intergenerational Effects of Worker Displacement," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 455-483, July.
    6. Kelly Foley & Giovanni Gallipoli & David A. Green, 2014. "Ability, Parental Valuation of Education, and the High School Dropout Decision," Journal of Human Resources, University of Wisconsin Press, vol. 49(4), pages 906-944.
    7. Stevens, Ann Huff & Schaller, Jessamyn, 2011. "Short-run effects of parental job loss on children's academic achievement," Economics of Education Review, Elsevier, vol. 30(2), pages 289-299, April.
    8. Frenette, Marc, 2007. "Est-ce que les universites profitent a la population locale de jeunes? Resultats provenant de la frequentation des universites et des colleges, et des gains des diplomes suivant la creation d'une nouv," Direction des etudes analytiques : documents de recherche 2006283f, Statistics Canada, Direction des etudes analytiques.
    9. Bradley Hardy, 2014. "Childhood Income Volatility and Adult Outcomes," Demography, Springer;Population Association of America (PAA), vol. 51(5), pages 1641-1665, October.
    10. Riddell, W. Craig, 2011. "Unemployment Compensation and Adjustment Assistance for Displaced Workers: Policy Options for Canada," CLSSRN working papers clsrn_admin-2011-31, Vancouver School of Economics, revised 22 Dec 2011.
    11. Frenette, Marc, 2007. "Do Universities Benefit Local Youth? Evidence from University and College Participation, and Graduate Earnings Following the Creation of a New University," Analytical Studies Branch Research Paper Series 2006283e, Statistics Canada, Analytical Studies Branch.
    12. Pierre Lefebvre & Philip Merrigan, 2008. "Family Background, Family Income, Cognitive Tests Scores, Behavioural Scales and their Relationship with Post-secondary Education Participation: Evidence from the NLSCY," Cahiers de recherche 0830, CIRPEE.

    More about this item


    Education; human capital; job loss; income shocks; causal effect;

    JEL classification:

    • I29 - Health, Education, and Welfare - - Education - - - Other
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other

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