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This study investigates the causal effects of education on individuals' transitions between employment and unemployment, with particular focus on the extent to which education improves re-employment outcomes among unemployed workers. Given that positive correlations between education and labour force transitions are likely to be confounded by the endogeneity of education, we make use of data on compulsory schooling laws and child labour laws as well as conscription risk in the Vietnam War period to create instrumental variables to identify the causal relationships. Results indicate that education significantly increases re-employment rates of the unemployed. Particularly large impacts are found in the neighborhoods of 12 and 16 years of schooling. Evidence on the impact of formal schooling on unemployment incidence is mixed.

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Technological change has considerable impact on human capital stock. Its impact, however, may be different on different types of human capital. As two major types of human capital investment, schooling and training are specialised to different degrees, therefore human capital obtained from schooling and that obtained from training embody different proportions of general and specific skills and may be affected differently by technological change. Focusing on the difference between human capital obtained from schooling and that from training, I develop a life-cycle human capital investment model to investigate the separate effects of technological change on schooling human capital and training human capital. Using data from National Longitudinal Survey of Youth 79 (1987-1994), I estimate the model parameters by using the method of nonlinear least squares. I find that training human capital is more vulnerable to obsolescence due to technological change than is schooling human capital, which suggests that individuals with more schooling enjoy an advantage in dealing with technological change over those with less schooling.

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The financial and economic crisis shattered the Lisbon Strategy’s attempt to increase the [European Union’s] EU’s employment rate to 70 per cent among 15-64 year olds by 2010. The new Europe 2020 strategy envisages a 75 per cent adult employment rate by 2020; however, this goal also seems unrealistic in light of the economic crisis which has caused the EU’s employment rate to drop significantly below 70 per cent. A crucial question now is whether a skill upgrade of the European labour force would help to increase the employment rate, especially among youth. This forum explores the relationship between education and employment throughout the EU.

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Adoption of innovations by firms and workers is an important part of the process of technological change. Many prior studies find that highly educated workers tend to adopt new technologies faster than those with less education. Such positive correlations between the level of education and the rate of technology adoption, however, do not necessarily reflect the true causal effect of education on technology adoption. Relying on data from the Workplace and Employee Survey, this study assesses the causal effects of education on technology use and adoption by using instrumental variables for schooling derived from Canadian compulsory school attendance laws. We find that education increases the probability of using computers in the job and that employees with more education have longer work experiences in using computers than those with less education. However, education does not influence the use of computer-controlled and computer-assisted devices or other technological devices such as cash registers and sales terminals. Our estimates are consistent with the view that formal education increases the use of technologies that require or enable workers to carry out higher order tasks, but not those that routinize workplace tasks.

Published abstract from IZA website. Show less

This study assesses the effects of education on both job search intensity and re-employment success for unemployed workers. Given that the positive correlation between education and job search intensity or re-employment success is likely to be confounded by the endogeneity of education, we make use of data on compulsory schooling laws to create instrumental variables to assess the causal effects of education. Based on data from the Labour Force Survey and the Canadian Census, we find that education both significantly increases job search intensity and significantly improves re-employment success for the unemployed. The evidence on job search intensity provides insights into one potential mechanism through which education may increase the probability of re-employment following unemployment.

Abstract from IZA website. Show less