School Retention of Teenagers Over the Business Cycle

Abstract

Variation in school retention and enrollment rates of teenagers, males and females, all races and nonwhites, are examined over the business cycle for the postwar period. It is found that both the retention and enrollment rates of teenage girls vary procyclically. For teenage boys, however, there is no response of enrollment and retention rates to changes in business conditions (with the exception of nonwhite males whose enrollment rates vary countercyclically). This difference in cyclical sensitivity is attributed to the lesser degree of cyclical variation in opportunity costs for teenage girls than for teenage boys, which results from girls' superior productive opportunities in the home. This paper examines how school enrollment and retention rates respond to changes in overall business conditions. A primary motivation for studying this relationship stems from the preoccupation of both government and social critics with the high incidence of teenage unemployment.l If teenagers' schooling decisions are in fact related to the level of unemployment (which reflects their opportunity costs), government policies directed at improving the job opportunities of school dropouts may have the undesirable side-effect of encouraging more teenagers to suspend their schooling. In this study I analyze postwar cyclical variations in the school retention and enrollment rates of teenagers, both males and females, all races and nonThe author is Assistant Professor, Queens College, City University of New York. * I am indebted to Barry Chiswick, Franklin Edwards, and Jacob Mincer for numerous comments on earlier drafts of this paper, and to Glen Cain and anonymous referees for aid in preparing the final revision. 1 Teenage unemployment rates are higher than average unemployment rates at all stages of the cycle, and they display greater (absolute) dispersion. For example, over the 1960-74 period, the unemployment rate of 16-17-year-old not-enrolled males ranged from a high of 28.5 percent in 1970 to a low of 14.8 percent in 1964 (the corresponding figures for all 16-17-year-old males are 18.8 percent in 1963 and 13.7 percent in 1966), while the unemployment rate of all males aged 16 years and over ranged from a high of 6.4 percent in 1961 to a low of 2.8 percent in 1969. Source: [13], Table B-7 and A-19. The Journal of Human Resources XI 2 This content downloaded from 157.55.39.104 on Mon, 20 Jun 2016 07:30:38 UTC All use subject to http://about.jstor.org/terms