Date Added: Oct 2010
This paper addresses the implications of transitory changes in labor market conditions for low versus high educated workers on the decision to acquire education. To identify this effect, the author uses the improvement in the labor market prospects of low educated workers motivated by the increases in employment and wages in the construction sector during the recent housing boom. The estimation strategy is based on the fact that changes in the labor market driven by the construction sector affect only men. Increases in construction activity are found to increase men's propensity to drop out of high-school, relative to women.