Higher Education and the Determination of Aggregate Male Employment by Age

This paper studies the determinants of age-specific employment rates among Swedish males, focusing on the effect of education on employment. We use cohort specific data for the time period 1984-1996 covering cohorts aged 21-45. Two states of the labour market are compared; the high employment period 1984-90 and the recent downturn 1991-96. It is found that aggregate age-group specific employment rates increase with the proportion of the cohort with an academic degree. The effect is stronger in the downturn period as compared to the boom period. However, we do not find any strong evidence in favour of the hypothesis that the effect of higher education on employment is declining with age. Estimations to capture crowding out effects between age-groups indicate larger effects in times of high employment when the own cohort effect is weaker.