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Labour Market Outcomes and Skills Acquisition of High-School Dropouts

  • Campolieti, Michele
  • Fang, Tony
  • Gunderson, Morley

We utilize an instrumental variable approach to analyse the effect that dropping out of high school has on 17 outcomes pertaining to wages, employment and subsequent skill acquisition for youths. Our analysis is based on the older cohort of the Youth in Transition Survey (YITS) for 2003, an ideal data set because it contains a rich array of outcome measures and their observable determinants as well as variables for instrumenting the dropout indicator (based on a link to the 1999 data). Our analysis indicates that dropouts have poorer wage and employment outcomes, and they do not make up for their lack of education through additional skill acquisition and training. The analysis thereby suggests that policies to curb dropping out could have both desirable efficiency effects (high returns) as well as distributional effects (high returns to otherwise more disadvantaged groups) and potential social spillover affects.

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File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2016%20-%20Campolieti-Fang-Gunderson.pdf
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Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2009-25.

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Length: 30 pages
Date of creation: 15 Mar 2009
Date of revision: 15 Mar 2009
Handle: RePEc:ubc:clssrn:clsrn_admin-2009-25
Contact details of provider: Web page: http://www.clsrn.econ.ubc.ca/

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  1. Kapsalis, Constantine, 1997. "Employee Training: An International Perspective," MPRA Paper 25754, University Library of Munich, Germany.
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  9. Baker, Michael & Benjamin, Dwayne & Stanger, Shuchita, 1999. "The Highs and Lows of the Minimum Wage Effect: A Time-Series Cross-Section Study of the Canadian Law," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 318-50, April.
  10. Daniel Parent, 2003. "Employer-supported training in Canada and its impact on mobility and wages," Empirical Economics, Springer, vol. 28(3), pages 431-459, July.
  11. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-40, November.
  12. Thomas S. Dee, 2003. "Are There Civic Returns to Education?," NBER Working Papers 9588, National Bureau of Economic Research, Inc.
  13. Adriana Lleras-Muney, 2005. "The Relationship Between Education and Adult Mortality in the United States," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 189-221.
  14. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-60, September.
  15. Philip Oreopoulos, 2006. "The compelling effects of compulsory schooling: evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 22-52, February.
  16. Milligan, Kevin & Moretti, Enrico & Oreopoulos, Philip, 2004. "Does education improve citizenship? Evidence from the United States and the United Kingdom," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1667-1695, August.
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  26. Kane, Thomas J & Rouse, Cecilia Elena, 1995. "Labor-Market Returns to Two- and Four-Year College," American Economic Review, American Economic Association, vol. 85(3), pages 600-614, June.
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