Upper Secondary School Completion and the Business Cycle

Rune Borgan Reiling and Bjarne Strøm

Scandinavian Journal of Economics, 2015, vol. 117, issue 1, 195-219

Abstract: Previous evidence suggests that enrollment in post-compulsory education increases (decreases) in cyclical downturns (upturns). However, little evidence exists on whether enrollment is successfully transformed into completed education. This paper adds to the literature by analyzing the relationship between completion of upper secondary education and regional unemployment using Norwegian regional panel data on students graduating from compulsory school between 1981 and 2004. We find robust evidence that completion rates are countercyclical. Our results suggest that poor labor-market conditions when starting upper secondary education have a lasting effect and motivate students to stay in school and graduate.

Date: 2015
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