working while learning or learning while working ? aviad tur-sinai dmitri romanov noam zussman march...

Working While Learning or Learning

While Working ?

Aviad Tur-Sinai

Dmitri Romanov

Noam Zussman

March 11, 2008

SubjectSubject

• Paper investigates empirically whether employment during academic study effects the duration of study and the likelihood of dropping out.

• Takes advantage of a comperhensive individual-level dataset constructed from administrative files and records – of candidates, students, and recipients of bachelor’s degrees.

Main FindingsMain Findings

• The relationship between the extent of students’ employment and duration of their studies depends on their age:

– Among students aged 22-26 at the beginning of their studies, the extent of employment has no effect on the duration of studies.

– Among the older students there is a strong positive effect.

Motivation for Study Motivation for Study (1)(1)

• Employment is common among first-degree students who come from diverse socioeconomic backgrounds and pursue various academic diciplines. It has considerable implications for the students’ economic situation and on access to the higher-education system and their patterns of study.


• Clashing conclusions via the literature:

– Brunello and Winter-Ember (2003):

Employment of students in Europe had no significant effect on the duration of study.

– Ehrenberg and Sherman (1987):

Employment of male students during the semester prolonged their degree studies and raised their dropout rates.


• Solving an econometric problem:

Endogeneity of the students’ employment (resulting from the positive correlation between unobserved personal characteristics: motivation, social connections...) when investigating the effect of employment on the duration of study.

Usual IV doesn’t solve the problem of individual heterogeneity in employment and scholastic achievements (Ruhm, 1997; Light,

2001; Hakkinen, 2006).

Therefore – we suggest a solution to solve the individual heterogeneity problem.

The DataThe Data::

Administrative records of first-degree students at higher education institutions in Israel - who began their studies in the 1999/2000 academic year.

The DataThe Data::

EducationFor each first-degree student (6 years follow-up):

– Preferences for institutions. – Fields of study at the time of enrollment.– The progression of studies: institution(s),

subjects completed.– Scholastic abilities.

The DataThe Data::

Employment and earning:

Matched employee-employer for the years

1999-2005 :– Number of months worked.– Annual gross earnings.– Tenure of employment with employer.

The DataThe Data::

Demographic data: (source: administrative register of residents)

– Sex– Date of Birth– Nationality/Religion– Country of birth– Date of immigration– Marital status– Number of children– Locality of residence– Identity of student’s parents

Total population: 24,960 students.

Progression of Studies

Proportion of students who received degree within

6 years from beginning of studies

80.5%

74.7%

66.8%

84.7%82.9%

73.3%

60.0%

75.0%

90.0%

Universities Private Colleges Public Colleges

Men Women

82.9%

78.9%

69.4%

Deviation of duration of degree studies from

standard years

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0.3

0.6

0.9

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4 years

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Proportion of first-degree recipients who began advanced degree studies immediately after first degree

(by duration of first-degree studies) %

0

10

20

30

40

50

60

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3 years 4 years 5 years

Employment

Measuring Rate of employment & Earnings

Rate of employment– A work load index.– Represented by the proportion of employee-wage

months in the course of the year out of twelve months.

Earnings– Annual earnings from all working places.– No. of months worked during the year.

Therefore: we can derive the average monthly wage.

Employment Rate of Fisrt-Degree students %

0

10

20

30

40

50

60

70

80

90

100

Higher-ed. institues - without prior employers - 3 years

Year 1 Year 2 Year 3 Year 4


0

10

20

30

40

50

60

70

80

90

100

Higher-ed. institues - with prior employers - 3 years Higher-ed. institues - without prior employers - 3 years



0

10

20

30

40

50

60

70

80

90

100

Higher-ed. institues - without prior employers - 4 years Higher-ed. institues - with prior employers - 4 years

Higher-ed. institues - with prior employers - 3 years Higher-ed. institues - without prior employers - 3 years


Time preparation for the bar

exams

First-Degree Students rate of employment(2004-1999)

Year (percent)199920002001200220032004

Total49.451.860.463.866.465.8

Universities45.047.657.361.163.965.8

Public Colleges55.257.263.666.468.170.9

Private Colleges61.163.770.171.975.160.1

Mean Annual Months Worked by First-Degree Students (by year of employment and Major)

4

5

6

7

8

9

10

Medicine Paramedicalprofessions

Engineeringand

architecture

Socialsciences

Business andadministration

sciences

Majors

1999 2000 2001 2002 2003

months

Earnings

Monthly Earnings of First-Degree Students (NIS, current prices)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Higher-ed. institues - without prior employers - 3 years



0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000



Average monthly earnings of (graduated) first-degree students (NIS, current prices)

3,7024,001

4,433

5,101

5,799

7,646

2,8632,422

2,665

3,166

4,098

5,178

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1999 2000 2001 2002 2003 2004

Men Women

Average monthly earnings of (graduated) first-degree students (NIS, current prices)

199920002001200220032004

Universities

all students2,9022,7643,0503,6114,3756,295

Students younger than 25

2,6462,2502,4613,0164,1236,113

Colleges

all students3,7893,7484,1544,8645,7546,461

Students younger than 25

3,0432,8363,2223,9265,0415,883

Average monthly earnings distribution of students who received degree within 6 years

0

5

10

15

20

NIS (thousands, current prices)

Universities - 2000 Academic Colleges - 2000

Students without prior employers%

Average monthly earnings distribution of students who received degree within 6 years

0

5

10

15

20

NIS (thousands, current prices)

Universities - 2000Universities - 2003

Academic Colleges - 2000Academic Colleges - 2003

Students without prior employers%

Occupation

Occupations of 20-29 age group, by standing in academic studies (year 2006)

OccupationHolds first degree

Studying for first degree

Neither

Academic professionals41.016.32.7

Associate professionals and technicians

25.021.814.8

Clerical workers16.619.821.6Agents, sales workers, and service workers

11.034.632.1

Agricultural, industrial, construction, and other skilled workers

3.54.819.2

Unskilled workers0.62.38.3Source: Central Bureau of Statistics, Household Expenditure survey 2006, data processed by the authors.

Occupations of 20-29 age group, by standing in academic studies (year 2004)

OccupationHolds first degree

Studying for first degree

Neither

Academic professionals41.016.32.7

Associate professionals and technicians

25.021.814.8

Clerical workers16.619.821.6Agents, sales workers, and service workers

11.034.632.1

Agricultural, industrial, construction, and other skilled workers

3.54.819.2

Unskilled workers0.62.38.3Source: Central Bureau of Statistics, Household Expenditure survey 2006, data processed by the authors.

Econometric Model&

Results

The aimThe aim::

Estimating the correlation of employment during

study and patterns of study (duration of study, likelihood of dropping out, likelihood of going on to advanced studies).

The econometric difficultyThe econometric difficulty

The need to contend with unobserved heterogeneity in the traits of those who choose to work and the others, traits that correspond both on the decision to work and the likelihood of scholastic success (scholastic abilities, diligence, motivation, etc.).

Let assume:

iY -Duration of study

Described by the following model:

iiii WXY

)1(

iii uAn array of exogenous controlling variables

(sex, ages, ethnic origin,

scholastic ability, …)

Employment during studies

Unobserved personal traits

"white noise"

iiii ZXW )2(

where:

iii

An array of variables associated with

employment but not with duration of

studies

Unobserved personal traits that affect labor

supply (social connections, job-

hunting ability, etc.)

"white noise"

HoweverHowever……

A positive correlation between and causes the unobserved-heterogeneity problem – which makes the employment variable in eq.(1) endogenous.

i i

ThereforeTherefore……

Using the Instrumental Variable Method as correlated with employment during study and not correlated with the variables which influence the likelihood of scholastic success.

What kind of Instrument VariableWhat kind of Instrument Variable? ?

First Suggestion The regional unemployment rate during the term of

studies (Ruhm, 1997; Light, 2001; Hakkinen, 2006).

Second suggestionA predetermined variable: employment in 1999

Explanation: reflects the individual’s propensity to labor and should not be correlated with the duration of first-degree studies.

Estimates of Controlling Variables

Explanatory variable

OLS model

Explained variable: Deviation of Duration of

degree studies from standard years

Male0.020

Age (in 2000)0.011***-

Arab0.224***

Recent Immigrant0.263***

Married (in 2000)0.096***-

No. Children (in 2000)0.108***-

Scholastic abilities0.001***

Private academic college0.044**

Switched schools0.359***

Took dual-major program 0.055***

Accepted for most-preferred major at enrollment0.062***-

Switched majors0.227***

Effect of students’ employment on standard deviation of years of study until award of first degree

TSLS with regional unemployment rate

and employment before beginning of

studies as IV

TSLS with regional unemployment rate as

IV

OLS

Log annual

earnings

Annual months worked

Log annual

earnings


Log annual

earnings


0.010***0.063*0.026*-0.179***-0.003**-0.003***-2000

0.011**0.0630.027***-0.205***-0.007***-0.005***-2001

0.012**0.0690.025***-0.201***-0.014***-0.008***-2002

0.0110.1050.0090.0610.008***-0.006***-2003

Year of study

Effect of students’

employment

denote 10%, 5% and 1% significance, respectivety .*** * ,**,


Age 22-26 (in 2000) vs. All students

Age 22-26All students

Log annual earnings


Log annual earnings


0.0050.0160.010***0.063*2000

0.0040.0030.011**0.0632001

0.0050.001-0.012**0.0692002

0.030**0.261**0.0110.1052003


Age 22-26All students

Log annual earnings


Log annual earnings


0.0050.0160.010***0.063*2000

0.0040.0030.011**0.0632001

0.0050.001-0.012**0.0692002

0.030**0.261**0.0110.1052003



Age 22-26 (in 2000) vs. All students

Effect of students’ employment on likelihood of…

Variable

Award of first degree within

standard years

Male-

Age (in 2000), years-

Arab-

Immigrant (1995 or later)-

Married (in 2000)+

Married in 2001-2006

No. of children (in 2000)+

Children added in 2001-2006

Scholastic abilities+


Variable


standard years

Award of degree within 6 years

Male--

Age (in 2000), years--

Arab--

Immigrant (1995 or later)--

Married (in 2000)++

Married in 2001-2006+

No. of children (in 2000)+

Children added in 2001-2006 -

Scholastic abilities+


Variable


standard years

Award of degree within 6 years

Continuing to advanced

studies

Male--+

Age (in 2000), years---

Arab---

Immigrant (1995 or later)---

Married (in 2000)+++

Married in 2001-2006+

No. of children (in 2000)+-

Children added in 2001-2006 --

Scholastic abilities++


VariableAward of first degree within standard years

Continuing to advanced studies

Switched schools-Switched majors-Earned dual-major first degree-S.D. of years of study for first degree -


Variable


standard years

Award of degree within

6 years

Continuing to advanced

studies

Worked at higher education institution during first-degree studies, by year:

First yearNo effect

Second year+

Third year ++

)Log (earnings during year:

First year--+

Second yearNo effect-No effect

Third year ++No effect

Conclusions

In Israel, 52 percent of first-degree students work during their first year of studies, as do 64 percent of those in their third year.

During their three years of studies, the Israeli students’ average earnings climb from 46 percent of the national average wage to 57 percent.

Conclusions – Cont.

Among students aged 22-26 at the beginning of their studies, the extent of employment has no effect on the duration of studies. It means that for then: learning are prior for working.

Among older students at the beginning of their studies, the extent of employment has a positive effect on the duration of studies. It means that for then: working are prior for learning.

Thank you

working while learning or learning while working ? aviad tur-sinai dmitri romanov noam zussman march...

Documents

employment slide

employment of students

extent of students employment

duration of studies

employment of male students

effect of employment

duration of study

proportion of students