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More Education, Less Volatility? The Effect of Education on Earnings Volatility over the Life Cycle

Judith Delaney () and Paul Devereux ()

No 11107, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Much evidence suggests that having more education leads to higher earnings in the labor market. However, there is little evidence about whether having more education causes employees to experience lower earnings volatility or shelters them from the adverse effects of recessions. We use a large British administrative panel data set to study the impact of the 1972 increase in compulsory schooling on earnings volatility over the life cycle. Our estimates suggest that men exposed to the law change subsequently had lower earnings variability and less pro-cyclical earnings. However, there is little evidence that education affects earnings volatility of older men.

Keywords: earnings volatility; return to education (search for similar items in EconPapers)
JEL-codes: I26 J01 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-eur and nep-lab
Date: 2017-10
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Published in: Journal of Labor Economics, 2019, 37 (1), 101-137

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Journal Article: More Education, Less Volatility? The Effect of Education on Earnings Volatility over the Life Cycle (2019) Downloads
Working Paper: More Education, Less Volatility? The Effect of Education on Earnings Volatility over the Life Cycle (2017) Downloads
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