The impact of mass layoffs on the educational investments of working college students

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 10078 July 2016 ABSTRACTThe Impact of Mass Layoffs on the Educational Investments of Working College Students * Analyzing how working students weather personal economic shocks is increasingly important as the fraction of college students working substantial hours has increased dramatically over the past few decades. Using administrative data on Ohio college students linked to matched firm-worker data on earnings, we examine how layoff affects the educational outcomes of working college students. Theoretically, layoff decreases the opportunity cost of college enrollment, but it could also make financing one's education more difficult, so the net effect is ambiguous. We find that layoff leads to a considerable reduction in the probability of employment while in school, but it has little impact on enrollment decisions at the extensive margin. On the intensive margin, we find that layoff leads to an increase in enrolled credits, consistent with the fact that the opportunity cost of college has decreased.JEL Classification: I21, I23, J63

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