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High school completion and future youth unemployment: new evidence from High School and Beyond
Author(s) -
Li Mingliang
Publication year - 2005
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.817
Subject(s) - unemployment , attendance , disadvantaged , economics , demographic economics , duration (music) , econometrics , multivariate probit model , bayesian probability , estimation , compulsory education , labour economics , economic growth , statistics , mathematics , art , literature , management
In this paper, I provide new evidence from High School and Beyond (HSB) on the effects of compulsory attendance on high school completion and future youth unemployment. I develop Bayesian estimation approaches to the simultaneous equation model with ordered probit and two‐limit censored regression and the bivariate duration model, accounting for the heterogeneity in returns to education and the nonlinearity in the effects of compulsory attendance. I find substantial variability in returns to education across schools and evidence of diminishing marginal effects of compulsory attendance on high school completion. The simulation results suggest that increasing the compulsory attendance age raises the probability of completing high school and reduces the proportion of time the individuals are unemployed. These effects are much more pronounced for disadvantaged students but less pronounced for advantaged students, suggesting the potential effects of compulsory attendance on reducing the inequality in education and employment. Copyright © 2005 John Wiley & Sons, Ltd.