Unfit or unqualified? Understanding the impact of health and qualifications on school and labour market exclusion

The project analyses the interplay between health, qualifications, and labour market outcomes, analysed in two different settings: (i) for employed workers who experience restructuring and whose qualifications and health endowment are potentially excluding factors, and (ii) for young people who are in the process of acquiring formal qualifications and who may be hampered by factors outside of their control. The project is organised into five work packages (WPs). WP1 The Hidden Costs of Competitive Tendering - Health and Labor Effects on Norwegian Bus Drivers We analyze the effects of implementing competitive tendering (CT) as a means to award bus routes in Norway. More specifically, we study drivers’ health and labor effect between 2003-2014. Using variation in implementation dates across municipalities we find significant short- and long-term effects on the sickness absence of bus drivers in tendered municipalities. This is also reflected in a increased disability pay in the long-term. Furthermore, there is a positive short-term effect on labor income. WP2 Unfit or unqualified? Career trajectories in the aftermath of a large labour demand shock in the Norwegian petroleum industry In 2014, a sudden and unexpected fall in oil prices entailed a large mass-lay off in the Norwegian petroleum sector. We explore how individual agencies regarding career pathways are shaped in the interaction between individual resources, organizational policies and practices as well as institutional influences. We find organisational mechanisms that until the recession in 2014 supported individuals to construct flexible career trajectories. These supportive mechanisms disappeared through the recession, creating disruptions that may increase risk for downward career trajectories, hence also downward social mobility, especially for older workers. Health and labour market vulnerability during a negative labour demand shock We investigate how pre-existing health conditions amplify the effects of adverse labor market shocks. Using variation in local unemployment generated by a shock in the petroleum prices, our study reveals that workers with poor health experience an increase in the likelihood of unemployment during economic downturns. Gender, age, education, and job type differences in susceptibility to health-related vulnerabilities are unveiled. Our findings also point towards substitutability between unemployment benefits and health-related benefits. WP3 Adverse Impacts of Supply Restrictions in Secondary Schooling We document negative effects on well-being for students who are denied admission to their preferred upper secondary institution and educational track. We find that students who are denied admission to their preferred track-school combination are significantly more likely to receive a mental health diagnosis, to reapply to a first-year program a year after their first application, and to experience delays in their school progression. We find that our effects are driven by the regions in which students have the fewest school options within their preferred track. Peer Effects in Mental Health We find evidence of a negative peer effect in mental health on high school completion for Norwegian students. Variation in the share of previously diagnosed peers affects both healthcare use for student with pre-existing mental health concerns and dropout for all students. Depression and anxiety constitute the subset of clinical diagnoses that seems to drive the effects on dropout, supporting emotional contagion being a key mechanism behind the results. The effects appear to persist regardless of relative position in class in terms of prior GPA, and to be stronger for immigrants. WP4 The Impact of Children’s Health Shocks on Parents’ Labor Earnings and Mental Health We investigate the impact of a child’s health shock on parents’ labor market outcomes. We construct counterfactuals for treated Finnish and Norwegian households with families who experience the same shock in later years. We find a sharp break in mothers’ earnings trajectories after the event, but not for fathers. Our findings do not align with the hypothesis of household specialization explaining these adjustments. Instead, these changes appear to be driven by increased caregiving demands, with mothers bearing the primary burden. Moreover, we also document a substantial impact on parents’ mental well-being. WP5 The impact of access to apprenticeship on dropout and early labour market outcomes We investigate the impact of access to apprenticeships on labour market and education outcomes. We find that, indeed, access to apprenticeship has a strong effect on the dropout risk for this student group: Increasing the ratio of number of contracts signed to the number of applicants has an implied elasticity of -1 with respect to the probability of not completing upper secondary by age 21. We also find effects on employment and on neither being in employment nor education.

Prosjektet har resultert i ein doktorgrad: Halvard S. Jansen "Empirical Essays on Health, Educational Attainment and Labor Market Exclusion". Disputas fann stad 26.6.2023. Påverknad er vanskeleg å måla, særleg så tett inntil prosjektslutt, men dei tema vi tar opp i prosjektet, ser ut til å bli meir og meir aktuelle i den pågåande samfunnsdebatten og politikkutforminga. Det er såleis ikkje vanskeleg å få gehør for prosjektet: Presentasjonane våre blir møtt med interesse ikkje berre blant fagfeller, men også i media og blant brukarar. Vi er etterspurde som kommentatorar, og både politisk og fagleg toppleiing i Arbeids- og inkluderingsdepartementet har invitert oss til å presentera arbeida våre. Vi har også fleire døme på at deltakarar til tunge offentlege utval og utgreiingar bli henta blant prosjektdeltakarane. Tilgangen til administrative registerdata frå SSB har vore heilt avgjerande for gjennomføringa av analysane i prosjektet. Dette er gjort mulig ved å byggja opp ein database, DEMOSOS, basert på denne typen data. Arbeidet har pågått i mange år, men gjennom dette prosjektet tok vi eit stort seg vidare når det gjeld forlenging og utviding og, ikkje minst, antal analysar. Dette er ein milepæl som er og kjem til å halda fram med å vere ei nøkkelinvestering for den empiriske velferds- og helseforskinga ved UiB og NORCE.

In this project we address the interplay between health, qualifications, and labour market outcomes. We analyse these mechanisms in two different settings: i) for employed workers who experience restructuring and whose qualifications and health endowment are potentially excluding factors , and ii) for young people who are in the process of acquiring essential formal qualifications and who may be hampered by factors outside of their control. The project is organised into five work packages (WPs). The first WP deals with restructuring; by analysing the introduction of competitive tenders in local public transportation. Here we aim at studying health, sickness absence and labour market exit for employees exposed to increased competition compared to colleges who were not, before and after re-organisation. In WP 2 we will examine the importance of health on the likelihood of leaving or staying during a period of downsizing. In this work package we will exploit the sudden and unexpected downsizing of the petroleum sector. In the remaining three WPs we analyse causes and consequences of school dropout by studying three presumably exogenous dropout predictors: Health at birth (measured by birth weight), school quality, and local variation in the probability of being offered apprenticeship contract. The dropout variation caused by these predetermined variables is then, in subsequent steps, utilised in the estimation of effects from dropout, on outcomes like mental health, social insurance uptake, and labour market exclusion. The research team has access to high-quality longitudinal register data for all Norwegian inhabitants, recently extended with detailed information on education and health. The methodological problems are approached in all work packages by identifying treatment and control groups. On this background we aim at identifying causal relationships, but also qualitative analysis is used to enrich and inform register based analysis in the project.