Out of Work and into School: Labor Market Policies and College Enrollment During the Great Recession

44 Pages Posted: 7 May 2014

See all articles by Andrew Barr

Andrew Barr

University of Virginia

Sarah E. Turner

University of Virginia; National Bureau of Economic Research (NBER)

Date Written: April 5, 2014

Abstract

The Great Recession brought large increases in unemployment and college enrollment; we explore how changing labor market conditions affected the decision to enroll, focusing on the role of state-specific dimensions of Unemployment Insurance (UI) policy. We measure the enrollment response to changing economic conditions, comparing eighteen and nineteen year-olds with older individuals likely to have accumulated some labor market experience. We find that individuals in their mid to late-twenties are proportionally more responsive to cyclical variation in economic conditions, and we identify a substantial role of the UI program in determining post-secondary enrollment outcomes. States in which academic post-secondary programs unrelated to a specific occupation are allowable under UI have substantially magnified enrollment responses to local economic conditions. In addition, we provide some of the first evidence that the duration of UI affects a displaced individual’s propensity to enroll. These findings identify a substantial overlap between UI policy and post-secondary enrollment decisions, indicating the potential importance of UI in not only providing income but also facilitating investments in skills.

JEL Classification: I230, J640, J650, I380, H530

Suggested Citation

Barr, Andrew and Turner, Sarah E., Out of Work and into School: Labor Market Policies and College Enrollment During the Great Recession (April 5, 2014). CESifo Working Paper Series No. 4732, Available at SSRN: https://ssrn.com/abstract=2432889 or http://dx.doi.org/10.2139/ssrn.2432889

Andrew Barr (Contact Author)

University of Virginia ( email )

1400 University Ave
Charlottesville, VA 22903
United States

Sarah E. Turner

University of Virginia ( email )

Curry School of Education
Charlottesville, VA 22903
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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