New Study: High Employment Protections? Then Forget College

A new paper at the American Enterprise Institute finds that high employment benefits appear to deflate interest in higher education.

by Collin Hitt

There is an intriguing new paper online at the American Enterprise Institute.  Researcher Aparna Mathur examined the effects that different countries’ labor market policies have on enrollment and attainment within higher education.  Controlling for factors like unemployment rate and per capita GDP, Mathur found that countries with higher “employment protections” had lower enrollment and completion rates in higher ed.

The paper focused mainly on working age adults going back to college. But Mathur also took a look at how labor market policies impacted the high-school-to-college transition in those countries: “labor market regulation is a significant factor in the choice to transition from secondary to higher education. Individuals are more likely to demand higher education in more flexible labor markets.”

In other words, students in countries with more flexible labor markets (i.e. with lower employment protections) are more likely to enroll in higher education upon completing high school (of their county’s equivalent).  This is fascinating, though certainly intuitive to some.

Perhaps there is a similar phenomenon at work in America. Whereas the differences in employment benefits are likely to be less stark between states than between countries across the globe, there are still meaningful differences in policies that shape different states’ labor markets. Maybe those differences can explain some of the variance in college-going rates among different states’ recent high school graduates.  Illinois, for one, is known to have fairly high unemployment insurance rates (or, to us Mathur’s term, high “firing taxes”).