Is post-secondary education a safe port and for whom? Evidence from Canadian data

Abstract

Previous studies document that adverse labor market conditions, proxied by the unemployment rate, stimulate post-secondary enrollment. This paper shows for the first time that unemployment not only affects enrollment but also changes the composition of the student body and students’ educational path, with important consequences for intergenerational mobility. Results show that unemployment stimulates university enrollment especially among individuals with highly educated parents. This has consequences for educational inequality. Students are also more likely to choose university over community college when unemployment rises. Thus, labor market conditions affect the type of education and skills that students acquire. Further, unemployment is shown to affect the decision of workers to return to school and complete their unfinished studies or acquire additional training.