Working Paper: NBER ID: w27694
Authors: Veronica Minaya; Brendan Moore; Judith Scott-Clayton
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.
Keywords: layoffs; plant closings; higher education
JEL Codes: I21; I23; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Job Displacement (J63) | Postsecondary Enrollment (I23) |
| Job Displacement (J63) | Postsecondary Enrollment (Manufacturing Workers) (L69) |
| Prior Earnings (J31) | Postsecondary Enrollment (I23) |
| Geographic Proximity to Educational Institutions (I23) | Postsecondary Enrollment (I23) |