Does education prevent job loss during downturns? Evidence from exogenous school assignments and COVID-19 in Barbados

Diether W. Beuermann, Nicolas Bottan, Bridget Hoffmann, C. Kirabo Jackson and Diego Vera-Cossio

European Economic Review, 2024, vol. 162, issue C

Abstract: Canonical human capital theories posit that education, by enhancing worker skills, reduces the likelihood that a worker will be laid-off during times of economic change. Yet, this has not been demonstrated causally. We link administrative education records from 1987 through 2002 to nationally representative surveys conducted before and after the COVID-19 onset in Barbados to explore the causal impact of improved education on job loss during this period. Using a regression discontinuity design, we show that females (but not males) who score just above the admission threshold for more selective secondary schools attain more years of education than those who scored just below (essentially holding initial ability fixed). We then find that these same females are much less likely to have lost a job after the onset of COVID-19. We show that these effects are not driven by labor supply decisions, selection into more resilient sectors and occupations, the ability to telework, job seniority, health status, fertility or access to child care, or improved social networks. Because employers observe incumbent worker productivity, these patterns are inconsistent with pure education signaling and suggest that education enhances worker skill.

Keywords: Education; Job loss; Recessions; COVID-19 (search for similar items in EconPapers)
JEL-codes: I20 J0 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Does Education Prevent Job Loss during Downturns?: Evidence from Exogenous Schools Assignments and COVID-19 in Barbados (2021)
Working Paper: Does Education Prevent Job Loss During Downturns? Evidence from Exogenous School Assignments and COVID-19 in Barbados (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:162:y:2024:i:c:s0014292124000047

DOI: 10.1016/j.euroecorev.2024.104675

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