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

70 Pages Posted: 17 Aug 2020 Last revised: 4 Mar 2021

Date Written: August 2020

Abstract

Displaced workers suffer 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 first direct evidence of workers’ enrollment responses following mass layoffs 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 five semesters and 29% completing a degree. However, much of this enrollment may have occurred regardless of the displacement. To estimate a causal effect, 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 effect is concentrated almost entirely among displaced manufacturing workers, who enroll at a rate of 2.5 per every 100. Such workers with lower within-firm earnings and from local labor markets with limited for-profit college options are the most likely to enroll in public institutions.

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Suggested Citation

Minaya, Veronica and Scott-Clayton, Judith, The Effect of Job Displacement on College Enrollment: Evidence from Ohio (August 2020). NBER Working Paper No. w27694, Available at SSRN: https://ssrn.com/abstract=3675246

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