Simone Balestra

When a Door Closes, a Window Opens? Long-term Labor Market Effects of Involuntary Separations

Abstract This study estimates the earning losses of workers experiencing an involuntary job separation. We employ, for the first time in the earning losses literature, a Poisson pseudo-maximum-likelihood estimator with fixed effects that has several advantages with respect to conventional fixed effects models. The Poisson estimator allows considering the full set of involuntary separations, including those with zero labor market earnings because of unemployment. By including individuals with zero earnings and by using our new method, the loss in the year of separation becomes larger than in previous studies. The loss starts with roughly 30% and, although it quickly shrinks, it remains at around 15% in the following years. In addition, we find that compared to other reasons for separation, the earning loss pattern is unique for involuntary separations, because no other type of separation implies such permanent scarring. This latter finding makes us confident that the self-reported involuntariness of a separation is a reliable source of information.

The Impact of High School Exit Exams on Graduation Rates and Achievement.

ABSTRACT The authors examined the short- and long-term effects of high school exit exams (HSEEs) on graduation rates and achievement using an interrupted time series approach. There is a positive overall effect of HSEE introduction for graduation rate trends, which is heterogeneous over time. HSEEs have a negative impact on graduation rates in the year of introduction and briefly after, which is short lived and becomes positive (but not statistically significant) over the long term. There is also a preintervention negative effect, suggesting that high schools prepare for the HSEE before introduction. There are no effects for achievement, possibly due to the lack of meaningful cross-state achievement data. The findings are robust to the inclusion of states that do not have HSEEs as a control group and also robust to controlling for No Child Left Behind introduction.