The relationship between labour force status and educational attainment: Evidence from a system of simultaneous equations model

Alam, Khorshed and Mamun, Shamsul Arifeen Khan (2016) The relationship between labour force status and educational attainment: Evidence from a system of simultaneous equations model. Economic Analysis and Policy, 52. pp. 55-65. ISSN 0313-5926

Abstract

This study presents an estimate of the joint determination of labour market status and educational attainment in Australia using cross-sectional data collected by the Australian Bureau of Statistics. This paper is based on the premise that achieving an increasing level of educational attainment and labour supply does not happen in isolation, rather they are determined jointly. Applying a simultaneous system of two-equations model, the study finds that there is a feedback effect between educational attainment and labour market status. In the labour market equation the effects of achieving a higher educational attainment on the probability of being employed has been statistically significant and the effect is negative. Thus, previous studies that ignored the feedback effects and used a single equation model have produced biased and inaccurate estimates of the effects of educational attainment on labour market outcome.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 13 Sep 2016 06:48
Last Modified: 20 Oct 2016 04:01
Uncontrolled Keywords: Simultaneous equations model; Labour supply; Education; Australia
Fields of Research : 14 Economics > 1402 Applied Economics > 140211 Labour Economics
14 Economics > 1403 Econometrics > 140301 Cross-Sectional Analysis
Socio-Economic Objective: C Society > 93 Education and Training > 9399 Other Education and Training > 939908 Workforce Transition and Employment
B Economic Development > 91 Economic Framework > 9102 Microeconomics > 910202 Human Capital Issues
B Economic Development > 91 Economic Framework > 9101 Macroeconomics > 910107 Macro Labour Market Issues
Identification Number or DOI: 10.1016/j.eap.2016.07.005
URI: http://eprints.usq.edu.au/id/eprint/29701

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