Association for Public Policy Analysis & Management

Displaced workers suffer large and persistent earnings losses. These losses can be mitigated by returning to school, yet the extent to which such workers enroll in post-secondary education in response to displacement is poorly understood. Using employer-employee matched administrative data from Ohio, we examine the enrollment patterns of workers displaced in a mass layoff or firm shutdown. On average, close to 10% of these displaced workers are enrolled in public two- or four-year colleges in the year after displacement, with the typical enrollment persisting for five semesters, and 33% completing a degree. However, much of this enrollment may have occurred regardless of the displacement. To estimate a causal effect, we examine employment, earnings, and enrollment of displaced workers over time in comparison to similar non-displaced workers. After confirming that earnings losses are large and persistent for Ohio workers displaced in the mid-2000s, we estimate that for every 100 displaced workers, only about 1 is induced to enroll in a public college within a year of displacement. We also find evidence that workers may anticipate a displacement event at their firm, as enrollment appears to begin rising in the quarters just prior to the displacement.