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On the Cyclicality of Schooling Decisions: Evidence from Canadian Data

Listed author(s):
  • Diana Alessandrini

    ()

    (Department of Economics and Finance, University of Guelph, Canada)

This paper studies the cyclicality of schooling decisions. Its novelty is threefold. This is the first study that focuses on Canada. Second, the analysis is based on longitudinal data, while previous papers in the literature mainly focused on pooled cross-sectional data. Third, the analysis distinguishes among individuals of different ability levels, which is new to the literature. Main results show that macroeconomic conditions affect schooling decisions of recent high-school graduates only. University enrollment is counter-cyclical: more students enroll in university during economic contractions. Ability, proxied by parental education, negatively affects the counter-cyclicality of university enrollment. Finally, economic downturns stimulate the acquisition of theoretical rather than practical education. Contrary to university enrollment, college enrollment is pro-cyclical and enrollment in other (non-university) PSE institutions is acyclical.

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File URL: http://www.rcfea.org/RePEc/pdf/wp16_14.pdf
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Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 16_14.

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Date of creation: May 2014
Handle: RePEc:rim:rimwps:16_14
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  1. Sakellaris, Plutarchos & Spilimbergo, Antonio, 2000. "Business cycles and investment in human capital: international evidence on higher education," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 221-256, June.
  2. J. C. Herbert Emery & Ana Ferrer & David Green, 2012. "Long-Term Consequences of Natural Resource Booms for Human Capital Accumulation," ILR Review, Cornell University, ILR School, vol. 65(3), pages 708-734, July.
  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. King, Ian & Sweetman, Arthur, 2002. "Procyclical Skill Retooling and Equilibrium," Working Papers 162, Department of Economics, The University of Auckland.
  5. 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.
  6. Mattila, J. Peter, 1982. "Determinants of Male School Enrollments, A Time-Series Analysis," Staff General Research Papers Archive 10849, Iowa State University, Department of Economics.
  7. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
  8. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
  9. Ricardo J. Caballero & Mohamad L. Hammour, 1996. "On the Timing and Efficiency of Creative Destruction," The Quarterly Journal of Economics, Oxford University Press, vol. 111(3), pages 805-852.
  10. Mattila, J Peter, 1982. "Determinants of Male School Enrollments: A Time-Series Analysis," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 242-251, May.
  11. Dellas, Harris & Koubi, Vally, 2003. "Business cycles and schooling," European Journal of Political Economy, Elsevier, vol. 19(4), pages 843-859, November.
  12. Julian R. Betts & Laurel L. McFarland, 1995. "Safe Port in a Storm: The Impact of Labor Market Conditions on Community College Enrollments," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 741-765.
  13. Neill, Christine, 2009. "Tuition fees and the demand for university places," Economics of Education Review, Elsevier, vol. 28(5), pages 561-570, October.
  14. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
  15. Kane, Thomas J, 1994. "College Entry by Blacks since 1970: The Role of College Costs, Family Background, and the Returns to Education," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 878-911, October.
  16. Ian King & Arthur Sweetman, 2002. "Procyclical Skill Retooling and Equilibrium Search," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(3), pages 704-717, July.
  17. Caballero, Ricardo J & Hammour, Mohamad L, 1994. "The Cleansing Effect of Recessions," American Economic Review, American Economic Association, vol. 84(5), pages 1350-1368, December.
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