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Hit and Run? Income Shocks and School Dropouts in Latin America

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  • Paula Cerutti
  • Elena Crivellaro
  • Germán Reyes
  • Liliana D. Sousa

Abstract

How do labor income shocks affect household investment in upper secondary and tertiary schooling? Using longitudinal data from 2005 to 2015 for Argentina, Brazil, and Mexico, this paper explores the effect of a negative household income shock on the enrollment status of youth ages 15–25. The findings suggest that negative income shocks significantly increase the relative risk of students exiting upper secondary and tertiary education in Argentina and Brazil, but not in Mexico. For the three countries, the analysis finds evidence that youth who exit school due to a household income shock have worse employment outcomes than similar youth who exit without a household income shock. Differences in labor markets and safety net programs likely play an important role in the decision to exit school as well as the employment outcomes of those who exit across these three countries.

Suggested Citation

  • Paula Cerutti & Elena Crivellaro & Germán Reyes & Liliana D. Sousa, 2019. "Hit and Run? Income Shocks and School Dropouts in Latin America," LABOUR, CEIS, vol. 33(4), pages 533-566, December.
    • Handle: RePEc:bla:labour:v:33:y:2019:i:4:p:533-566
    DOI: 10.1111/labr.12156
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    Cited by:

    1. Guido Neidhöfer & Nora Lustig & Mariano Tommasi, 2021. "Intergenerational transmission of lockdown consequences: prognosis of the longer-run persistence of COVID-19 in Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 571-598, September.
    2. Nora Lustig & Valentina Martinez Pabon & Guido Neidhöfer & Mariano Tommasi, 2020. "Short and Long-Run Distributional Impacts of COVID-19 in Latin America," Working Papers 2013, Tulane University, Department of Economics.
    3. Matías Ciaschi, 2020. "Job loss and household labor supply adjustments in developing countries: Evidence from Argentina," CEDLAS, Working Papers 0271, CEDLAS, Universidad Nacional de La Plata.
    4. Wodon, Quentin, 2022. "Global report on integral human development 2022: measuring the contributions of Catholic and other faith-based organizations to education, healthcare, and social protection," MPRA Paper 114809, University Library of Munich, Germany.

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