Further Education During Unemployment

Abstract

Evidence on the effectiveness of retraining U.S. unemployed workers primarily comes from evaluations of training programs, which represent one narrow avenue for skill acquisition. We use high-quality records from Ohio and a matching method to estimate the effects of retraining, broadly defined as enrollment in postsecondary institutions. Our simple method bridges two strands of the dynamic treatment effect literature that estimate the treatment-now-versus-later and treatment-versus-no-treatment effects. We find that enrollees experience earnings gains of six percent three to four years after enrolling, after depressed earnings during the first two years. The earnings effects are driven by industry-switchers, particularly to healthcare.