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Time-to-Degree and the Business Cycle

Author

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  • Messer, Dolores

    (University of Bern)

  • Wolter, Stefan C.

    (University of Bern)

Abstract

When students themselves enjoy large degrees of freedom in determining the duration of their studies, it results in a fairly large degree of interindividual variance in terms of time-to-degree. This paper investigates individual time-to-degree in a model where students determine the optimum time-to-degree whilst weighing up the cost against the consumption benefit accruing from an additional semester of studies. According to this model, the cost level and consumption benefit depend, in turn, on the general economic environment during the study period. An empirical investigation using a data set based on Swiss university graduates from 1981 to 2001 shows that changes in the unemployment rate, real interest rate, wage levels, and economic growth have a significant impact on individual time-to-degree. These results are consistent with the conclusions derived from the theoretical model.

Suggested Citation

  • Messer, Dolores & Wolter, Stefan C., 2007. "Time-to-Degree and the Business Cycle," IZA Discussion Papers 2787, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2787
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    9. van Ours, J. C. & Ridder, G., 2003. "Fast track or failure: a study of the graduation and dropout rates of Ph D students in economics," Economics of Education Review, Elsevier, vol. 22(2), pages 157-166, April.
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    Cited by:

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    2. Graves, Jennifer & Kuehn, Zoë, 2021. "Specializing in growing sectors: Wage returns and gender differences," Labour Economics, Elsevier, vol. 70(C).
    3. Elizabeth B. Clelan & Michael S. Kofoed, 2017. "The Effect Of The Business Cycle On Freshman Financial Aid," Contemporary Economic Policy, Western Economic Association International, vol. 35(2), pages 253-268, April.
    4. Hofmann, Barbara & Hohmeyer, Katrin, 2016. "The effect of the business cycle at college graduation on fertility," Economics of Education Review, Elsevier, vol. 55(C), pages 88-102.
    5. Jeffrey A. Groen, 2016. "The Impact of Labor Demand on Time to the Doctorate," Education Finance and Policy, MIT Press, vol. 11(1), pages 43-69, Winter.
    6. Kristine Simson, 2015. "Explaining upper secondary school dropout: new evidence on the role of local labor markets," Empirical Economics, Springer, vol. 48(4), pages 1419-1444, June.
    7. Bradley, Elizabeth S., 2012. "The Effect of the Business Cycle on Freshman Major Choice," MPRA Paper 42412, University Library of Munich, Germany.
    8. Denzler, Stefan & Wolter, Stefan C., 2011. "Too Far to Go? Does Distance Determine Study Choices?," IZA Discussion Papers 5712, Institute of Labor Economics (IZA).
    9. Carmen Aina & Eliana Baici & Giorgia Casalone, 2010. "Time-to-Degree: Students' Abilities, University Characteristics or What Else? Evidence from Italy," Working Papers 130, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    10. Gitto, Lara & Minervini, Leo Fulvio & Monaco, Luisa, 2012. "University dropouts: supply-side issues in Italy," MPRA Paper 56656, University Library of Munich, Germany, revised Nov 2013.
    11. Jennifer Graves & Zoë Kuehn, 2022. "Higher education decisions and macroeconomic conditions at age eighteen," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 13(1), pages 171-241, May.

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    More about this item

    Keywords

    consumption benefit; time-to-degree; business cycle;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I2 - Health, Education, and Welfare - - Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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