Time-to-Degree and the Business Cycle

39 Pages Posted: 18 May 2007

See all articles by Dolores Messer

Dolores Messer

University of Bern

Stefan C. Wolter

Swiss Coordination Centre for Research in Education (SKBF); University of Bern - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: May 2007

Abstract

When students themselves enjoy large degrees of freedom in determining the duration of their studies, it results in a fairly large degree of interindividual variance in terms of time-to-degree. This paper investigates individual time-to-degree in a model where students determine the optimum time-to-degree whilst weighing up the cost against the consumption benefit accruing from an additional semester of studies. According to this model, the cost level and consumption benefit depend, in turn, on the general economic environment during the study period. An empirical investigation using a data set based on Swiss university graduates from 1981 to 2001 shows that changes in the unemployment rate, real interest rate, wage levels, and economic growth have a significant impact on individual time-to-degree. These results are consistent with the conclusions derived from the theoretical model.

Keywords: time-to-degree, business cycle, consumption benefit

JEL Classification: C81, E32, I2, I23

Suggested Citation

Messer, Dolores and Wolter, Stefan C., Time-to-Degree and the Business Cycle (May 2007). IZA Discussion Paper No. 2787. Available at SSRN: https://ssrn.com/abstract=987493

Dolores Messer

University of Bern ( email )

Gesellschaftsstrasse 49
CH-3012 Bern, BERN 3001
Switzerland

Stefan C. Wolter (Contact Author)

Swiss Coordination Centre for Research in Education (SKBF) ( email )

CH - 5000 Aarau
Switzerland
+41 62 835 23 90 (Phone)
+41 62 835 23 99 (Fax)

HOME PAGE: http://www.skbf-csre.ch

University of Bern - Department of Economics ( email )

Gesellschaftstrasse 49
Bern, CH-3012
Switzerland
+41 31 631 40 95 (Phone)
+41 31 631 39 92 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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