The Effect of Job Displacement on College Enrollment: Evidence from Ohio

Abstract

Displaced workers su er large and persistent earnings losses. These losses can be mitigated by returning to school, yet the extent to which such workers enroll in post-secondary education in response to displacement is poorly understood. Using employer-employee-student matched administrative data from Ohio, we provide the rst direct evidence of workers' enrollment responses following mass layo s in the United States. Close to 10% of these displaced workers enroll in public two-or four-year colleges after displacement, with the typical enrollment persisting for ve semesters and 29% completing a degree. However, much of this enrollment may have occurred regardless of the displacement. To estimate a causal e ect, we compare displaced workers over time to similar non-displaced workers. We estimate that for every 100 displaced workers, only about 1 is ever induced to enroll in a public college as a result. This e ect is concentrated almost entirely among displaced manufacturing workers, who enroll at a rate of 2.5 per every 100. Such workers with lower within-rm earnings and from local labor markets with limited for-pro t college options are the most likely to enroll in public institutions.

The Effect of Labor Market Shocks Across the Life Cycle

“…have not taken the age-varying impact across the life cycle into account. The results from our analysis suggest that the human capital investment response is much greater among young individuals than previously suggested (almost four times larger than the effects identified in Minaya et al (2020)) while it is not significant among older individuals.…”

“…Note that due to the timing of data collection, the education effects appear already in relative time zero. 15 In terms of the existing literature, Minaya et al (2020) find an increase in postsecondary enrollment following involuntary displacement events in the US. The effects they identify are small and only marginally economically meaningful, suggesting that less than 1 out of every 100 displaced individuals return to school following an involuntary layoff.…”

“…The effects they identify are small and only marginally economically meaningful, suggesting that less than 1 out of every 100 displaced individuals return to school following an involuntary layoff. However, while Minaya et al (2020) provides important insights on average effects across a wide range of age groups, they…”

“…However, while Rinz (forthcoming) studies heterogeneity across age groups, examining the impact of recession-induced local economic conditions (regardless of being displaced) is fundamentally different from examining the impact of involuntary job separations. 6 Mortality(Eliason and Storrie 2009a;Sullivan and von Wachter 2009;Browning and Heinesen 2011), morbidity(Browning et al 2006;Eliason and Storrie 2010), pension(Rege et al 2009), fertility(Huttunen and Kellokumpu 2016;Del Bono et al 2012), children's school performance(Oreopoulos et al 2008;Mörk et al 2020;Tanndal et al 2020;Coelli 2011;Rege et al 2011;Willage and Willén 2020), mobility(Huttunen et al 2018), marital status(Eliason 2012), school enrollment(Minaya et al 2020), and criminality(Rege et al 2009b).…”

The Effect of Labor Market Shocks across the Life Cycle

“…However, while Rinz (forthcoming) studies heterogeneity across age groups, examining the impact of recession-induced local economic conditions (regardless of being displaced) is fundamentally different from examining the impact of involuntary job separations. 6 Mortality(Eliason and Storrie 2009a;Sullivan and von Wachter 2009;Browning and Heinesen 2011), morbidity(Browning et al 2006;Eliason and Storrie 2010), pension(Rege et al 2009), fertility(Huttunen and Kellokumpu 2016;Del Bono et al 2012), children's school performance(Oreopoulos et al 2008;Mörk et al 2020;Tanndal et al 2020;Coelli 2011;Rege et al 2011;Willage and Willén 2020), mobility(Huttunen et al 2018), marital status(Eliason 2012), school enrollment(Minaya et al 2020), and criminality(Rege et al 2009b).…”