Losing prospective entitlement to unemployment benefits: Impact on educational attainment

Arbeitspapier

Providing income support to unemployed education-leavers reduces the returns to investments in education because it makes the consequences of unemployment less severe. We exploit in a difference-in-differences approach a two-part policy reform in Belgium to study whether conditioning the prospective entitlement to unemployment benefits for education-leavers on age, and schooling attainment can affect educational achievements. The first part of this reform disqualified labor market entrants over the age of 25 from benefits for which they were otherwise eligible if unemployed with little or no employment experience one year after leaving education. The second part conditioned the eligibility for this unemployment benefit for youth below the age of 21 on the attainment of a high school degree. While we find evidence that the prospect of financial loss in case of unemployment can significantly raise degree completion and reduce dropout in higher education, we find no evidence of an increase in the graduation rate in high school.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: NBB Working Paper ; No. 410

Classification and Topics

• Classification: Wirtschaft ; National Government Expenditures and Education ; Analysis of Education ; Returns to Education ; Education: Government Policy ; Labor Economics Policies ; Demographic Economics: Public Policy ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Unemployment Insurance; Severance Pay; Plant Closings ; Mobility, Unemployment, and Vacancies: Public Policy
• Subject: Unemployment insurance ; conditionality ; degree completion ; school dropout ; behavioral biases

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cockx, Bart ; Declercq, Koen ; Dejemeppe, Muriel
• Event: Veröffentlichung
• (who): National Bank of Belgium
• (where): Brussels
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/273114
• Last update: 10.03.2025, 11:45 AM CET