To Study or to Work? Education and Labour Market Participation of Young People in Poland

To Study or to Work? Education and Labour Market Participation of Young People in Poland This paper proposes Heckprobit estimates of the determinants of labour market participation of a sample of young (15-30) Poles, controlling for the sample selection bias caused by excluding those in education. There is evidence of sample selection bias in the case of young men, suggesting that they obey more than women to economic factors in making their educational choices. Education is an important determinant of the success in the labour market. The instrumental variables used in the selection equation – the local unemployment rate, expected lifetime earnings and the opportunity cost of education – have a statistically significant impact on the probability to be in education. In contrast with several previous studies relative to mature market economies, in high unemployment voivodships young people prefer to seek a job, rather than studying. In turn, this contributes to make regional unemployment persistent. JEL Classification: C35, I2, J24, P3, P52