Human Capital Accumulation: Family Background, Cohort Effects and Unemployment

This paper investigates whether and to what extent demographic change has an impact on human capital accumulation. The effect of relative cohort size and cohort composition on educational attainment of young adults in Germany is analyzed utilizing data from the German Socio-Economic Panel for West-German individuals of the birth cohorts 1962 to 1986. These are the cohorts which entered the labor market since the 1980’s. Due to changes in the labor market situation during the 1980’s and 1990’s, we pay particular attention to the impact of labor market conditions. The results suggest that the variables measuring demographic change exert a considerable though heterogeneous impact on the human capital accumulation of young Germans. Moreover, changing labor market conditions during the 1980’s and 1990’s exhibit a sizeable impact on both the highest schooling degree and the highest professional degree obtained by younger cohorts. JEL-Classification: J11, J24, C25