Does Enrollment Lead to Completion? Measuring Adjustments in Education to Local Labor Market Shocks

Abstract

Adverse local labor market shocks such as those generated by exposure of local industries to international trade have impacts on high school enrollment and completion that are theoretically ambiguous. Incentives to stay in school increase when employment prospects are weak; yet, public resources for local schools may also shrink. This paper demonstrates that, while high school enrollment rates increase significantly, high school degree attainment does not show commensurate growth. ‘Outmigration’ of young adults and changes in the timing of degree receipt reconcile these measures. In addition, high school attainment effects are likely attenuated by declines in local resources per student.