How Do Crises Affect Schooling Decisions? Evidence from Changing Labor Market Opportunities and a Policy Experiment

Abstract

This paper examines the effect of labor market opportunities on schooling and employment decisions in 12 urban areas in Argentina over 12 years, emphasizing the recession/crisis years of 1998-2002. In “typical” years deteriorating job rates boost the probability of attending school and decrease the probability of combining work and school, particularly for boys; the probability of being in school for secondary school children was about 6% higher in 2002 than in 1998. These estimates reflect a new 1996 Federal Education Law (FEL) that extended mandatory education to 10 years.