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How educational choices respond to large labor market shocks: Evidence from a natural experiment

Ayhab F. Saad and Belal Fallah

Labour Economics, 2020, vol. 66, issue C

Abstract: This paper uses the closure of the Israeli labor market as a large labor market shock and examines its impact on Palestinian youths' educational choices. The sudden closure denied thousands of Palestinian workers, mostly low-skilled males, access to the Israeli labor market. We provide evidence that the conflict-induced labor demand shock reduced the opportunity cost of attending school and consequently, male students' high school dropout rates.

Keywords: High school dropout; The opportunity cost of school; Large labor demand shock; Palestinian youth (search for similar items in EconPapers)
JEL-codes: I20 I26 J2 J24 O12 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.labeco.2020.101901

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