Do layoffs increase transitions to postsecondary education among adults

Faced with job loss, displaced workers may choose to return to school to help them reintegrate into the labour force. Job losses in a given local labour market may also induce workers who have not yet been laid off to pre-emptively enrol in postsecondary (PS) institutions, as a precautionary measure. Combining microdata and grouped data, this study examines these two dimensions of the relationship between layoffs and PS enrolment over the 2001-to-2011 period. Using individual-level longitudinal microdata and controlling for the unobserved heterogeneity of workers in a flexible way, the study finds that laid-off male and female workers are two to four percentage points more likely than other men and women to transition to PS education in the year of the layoff or the following year (from a baseline rate of about three per cent). For both sexes, full-time PS enrolment accounts for most of the increase in enrolment. Statistically significant correlations between layoffs and full-time PS attendance are detected between two years before job loss and two years after job loss. The study also takes advantage of the fact that the 2008-2009 recession increased layoff rates in a differentiated way across Canada and, thus, generated exogenous variation in layoff rates at the regional level.