The chapters in the following pages are concerned with youth, education and work.
Providing jobs for young people is indubitably important, especially given the apparent worsening, or at least, non-improvement of youth’s labor market prospects in the devel-oping world, which concomitantly with the demographic dividend sets the stage for a tragedy of missed opportunities. This means that continued efforts to provide evidence regarding the conditions under which labor market interventions work are necessary.
Related to this endeavor, an increased understanding of the interdependencies of family members could contribute to more efficient policy interventions. This thesis thus seeks to emphasize the importance of family arrangements in evaluating the intra-household allocative impacts of shocks. Although spillover effects are easily thought of, they are not systematically sought after. This observation includes the literature on impact evaluations, where a focus on the entire household might nuance or reinforce some of the conclusions regarding educational and labor market interventions.
Although research questions differ among chapters, the overall objective of this thesis is to further the understanding of economic processes related to young people’s destinies in the labor market. Chapter 1 provides a literature review of school-to-work transi-tion studies in developing countries. I therein discuss the theoretical foundatransi-tions of the school-to-work transition, and contend that the lion’s share of the literature has placed it in a search and matching framework, given that this framework is explicitly concerned with flows inside—and in and out of—the labor market. Despite restrictive conditions for nesting a proportional hazards model in a theoretical search and matching setting, the proportional hazards model is the most commonly used model for study-ing transitions in the labor market. I thereafter survey studies of microeconomic and macroeconomic determinants of successful transitions. Being a woman is systematically associated with longer transition lengths. Education mostly shortens transition lengths, except for dualistic labor markets where queuing for public sector jobs is a rational option.
Chapter 2, co-written with Mohamed Ali Marouani, studies the Malaysian labor market through the lens of skill-biased technological change (SBTC). We argue that SBTC was a feature of the Malaysian labor market, and apply a retrospective computable general equilibrium model to see how Malaysian graduates would have fared under two counter-factual scenarios: 1) the absence of skill-biased technological change, and 2) a stricter educational policy, modeled as an unwillingness to expand the number of students
in higher education institutions during the period 2005-2020. The results show that the open-door educational policy of Malaysia is likely to have exerted a downward pressure on tertiary wages, limiting the inequality-increasing effects of skill-biased technological change.
Chapter 3 looks at sibling occupational spillovers in Indonesia, using census data from 1980. Revisiting the INPRES school construction program of 1974-1978, it estimates the causal variation in labor market participation among older siblings as a function of exogenous variations in schooling of their younger siblings, affected by the program. I find that additional schooling displaces older siblings’ from housekeeping into the labor market. The effect remains once the sample is restricted to sibling pairs where both siblings are out of school, suggesting that the effect is not merely due to financing of the younger child’s education. Moreover, the results lend weak support to the presence of occupational specialization at the household level—a situation where occupations are distributed according to the relative returns to these occupations among siblings. Rather, they are indicative of positive labor market spillover effects among siblings.
Chapter 4, co-authored with Philippe De Vreyer, examines the impact of adult deaths in Senegalese households on children’s work and schooling outcomes. In a first part, using two rounds of thePoverty and Family Structure (PSF) survey, we find limited impacts from the death of an unspecified adult on children’s outcomes. However, since polygamy is widespread in Senegal and households are large, we then focus on the impact of children whose primary caregiver dies. Using both individual and household fixed effects, we find a strong and significant effect on school presence and on work for those children who lost their primary caregiver. This suggests the consequences of shocks are far from equally distributed within households in Senegal, suggesting limits to the often-cited extended family solidarity prevailing in the African context.
Chapter 5 studies the impact of parental depressive symptoms on child schooling and work in Mexico. Bad mental health in parents can translate into bad parenting, revenue loss and bad child mental health, and might have profound implications on the child’s development. I first use a simple theoretical model to establish predictions for the influence of depression on child schooling and work. Then, using three waves of the Mexican Family Life Survey, I use violent assault in the street as a source of exogenous variation in parental depressive symptoms to test the above predictions. I find that increases in parental depressive symptoms, as measured by a 20-item depression scale
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specifically developed for the Mexican context, lead to higher repetition rates and higher work rates in children. The effects are not driven by parents who had high levels of depressive symptoms in the first round of the survey.
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