Losing prospective entitlement to unemployment benefits. Impact on educational attainment

B. Cockx, Koen Declercq, Muriel Dejemeppe

Research output: Working paper / PreprintWorking paper

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Abstract

Providing income support to unemployed education-leavers reduces the returns to investments in education because it makes the consequences of unemployment less severe. We evaluate a two-part policy reform in Belgium to study whether conditioning the prospective entitlement to unemployment benefits for education-leavers on age or schooling attainment can affect educational achievements. The results show that the prospect of financial loss in case of unemployment can significantly raise degree completion and reduce dropout in higher education, but not in high school. We argue that the higher prevalence of behavioral biases among lower educated and younger students could explain these contrasting findings.
Original languageEnglish
Place of PublicationMaastricht
PublisherROA
Number of pages32
DOIs
Publication statusPublished - 17 Aug 2022

Publication series

SeriesROA Research Memoranda
Number003

JEL classifications

  • h52 - National Government Expenditures and Education
  • i21 - Analysis of Education
  • i28 - Education: Government Policy
  • j08 - Labor Economics Policies
  • j18 - Demographic Economics: Public Policy
  • j24 - "Human Capital; Skills; Occupational Choice; Labor Productivity"
  • j65 - "Unemployment Insurance; Severance Pay; Plant Closings"
  • j68 - Mobility, Unemployment, and Vacancies: Public Policy

Keywords

  • unemployment insurance
  • conditionality
  • degree completion
  • school dropout
  • behavioral biases

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