11, Porte des Sciences
LISER Conference Room, MSH 1st floor
(joint with Bart Cockx and Koen Declercq)
Providing income support to unemployed school-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 two policy reforms in Belgium to study whether conditioning future entitlement to unemployment benefits for school-leavers on age and educational attainment affects degree completion and dropout in secondary and higher education. The first 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 reform 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 first reform significantly raised degree completion and reduced dropout in higher education, the second reform did not improve the graduation rate in high school.