The Impact of the Unemployment Rate on Enrollment in Higher Education: An Empirical Analysis of the Impact of Changes in the Unemployment Rate on Individual Educational Enrollment Decisions in Socio-Economically Different European Countries

Louise Pugholm Aabo & Rasmus Heitmann

Student thesis: Master thesis


This thesis examines the differences in the effects of unemployment rates on the individual decision to enroll in higher education in socioeconomically different European countries. The examined period is 2004-2013 for Austria, Denmark, Hungary, Italy and Spain. Important factors according to Becker’s (1993) Human Capital Theory are compared to previous literature to determine what factors are paramount in educational decisions. Data from the public use files of the Labour Force Survey is used together with data from Eurostat. With a logit model, it is found that the effect of unemployment on the decision to enroll in higher education in Denmark, Hungary and Spain is countercyclical. In contrast, it is procyclical in Austria and Italy, though the minor variation in the Austrian unemployment rates does not warrant certain conclusions. Results in Denmark, Italy and Spain are robust to various changes. It is argued that the differing effects across countries mainly stem from differences in the cost of schooling, median income, return to education, and the possibility of working part-time while studying. A concern regarding the results is whether omitted variables bias is present. For future studies, better interpretation of the enrollment decision within countries and comparisons between countries could be obtained with more detailed data.

EducationsMSc in Applied Economics and Finance, (Graduate Programme) Final Thesis
Publication date2021
Number of pages148
SupervisorsDaniel Borowczyk-Martins