Local unemployment and the timing of post-secondary schooling

•Local unemployment has both a short- and a long-run effect on school enrollment and completion.•The short-run effect causes students to advance their enrollment of additional schooling.•The long-run effect causes students who would never have enrolled to enroll and complete schooling.•The effects are strongest for children of parents with no higher education.•The long-run effects are only found for shorter educational programs.

Using Danish administrative data on all high school graduates from 1984 to 1992, I show that local unemployment has both a short- and a long-run effect on school enrollment and completion. The short-run effect causes students to advance their enrollment, and consequently their completion, of additional schooling. The long-run effect causes students who would otherwise never have enrolled to enroll and complete schooling. The effects are strongest for children of parents with no higher education.