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

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  • Saad, Ayhab F.
  • Fallah, Belal

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.

Suggested Citation

  • Saad, Ayhab F. & Fallah, Belal, 2020. "How educational choices respond to large labor market shocks: Evidence from a natural experiment," Labour Economics, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:labeco:v:66:y:2020:i:c:s0927537120301056
    DOI: 10.1016/j.labeco.2020.101901
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    2. Sameh Hallaq, 2020. "The Palestinian Labor Market over the Last Three Decades," Economics Working Paper Archive wp_976, Levy Economics Institute.
    3. Feeny, Simon & Mishra, Ankita & Trinh, Trong-Anh & Ye, Longfeng & Zhu, Anna, 2021. "Early-Life exposure to rainfall shocks and gender gaps in employment: Findings from Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 533-554.
    4. Amr Ragab & Ayhab F. Saad, 2023. "The effects of a negative economic shock on male marriage in the West Bank," Review of Economics of the Household, Springer, vol. 21(3), pages 789-814, September.
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    6. David, Sandberg, 2024. "The Effect of Military Base Closures on Young Adults," Working Papers 2024:9, Lund University, Department of Economics.

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    More about this item

    Keywords

    High school dropout; The opportunity cost of school; Large labor demand shock; Palestinian youth;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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