The impact of parental layoff on higher education investment

This paper uses variation in the timing of parental layoff to identify the effect of parental job loss on higher education enrollment. Unlike research that compares laid-off workers to workers who do not lose their jobs, all families in our analysis experience a layoff at some point. The treatment group (layoff when child is 15-17) and control group (layoff when child is 21-23) have statistically indistinguishable initial characteristics, but substantially different higher education enrollment rates. We find that parental job loss between ages 15 and 17 decreases college enrollment by 10 percentage points.