Effects of economic shocks on university dropouts: evidence from the Brazilian trade liberalization

• Grant number: 21/14505-3
• Support Opportunities: Scholarships in Brazil - Doctorate
• Start date: June 01, 2022
• End date: May 31, 2024
• Field of knowledge: Applied Social Sciences - Economics - International Economy
• Principal Investigator: Emanuel Augusto Rodrigues Ornelas
• Grantee: Lucas de Castro Mariano
• Host Institution: Escola de Economia de São Paulo (EESP). Fundação Getúlio Vargas (FGV). São Paulo , SP, Brazil
• Associated scholarship(s): 23/10322-7 - Effects of economic shocks on dropouts from higher education: evidence from the Brazilian trade liberalization, BE.EP.DR

Abstract

This study aims to analyze the effects of economic shocks on higher education dropout rates, using trade liberalization in the early 1990s in Brazil as an exogenous shock to the economy. The exposure of each region to the trade shock depends on the composition of employment in each industry in relation to the total employed in the industrial sector and on the tariff reduction. We look at the effect of liberalization on dropout by distinguishing between the income effect (adult workers) and the substitution effect (young workers). It is expected that the income effect will increase dropout from higher education, reflecting the negative effect of liberalization on the adult labor market, while the income effect would cause a reduction in dropout due to the decrease in the opportunity cost of studying. (AU)