samlet årgang - Økonomisk Institut - Københavns Universitet

Nationaløkonomisk Tidsskrift 143 (2005): 81-103
The Effect of Labour Market Conditions
on the Time-to-Completion of
Higher Education in Denmark
Nabanita Datta Gupta
The Danish National Institute of Social Research, E-mail: ndg@sfi.dk
Mark Yuying An
Fannie Mae, U.S.A., E-mail: mark_ y_an@fanniemae.com
SUMMARY: The effect of labour market conditions on the time-to-completion of higher
education is analysed on a sample of high school graduates and equivalents drawn from
the 0.5% Danish Longitudinal Sample database. A semi-parametric hazard model of
education duration with correction for unobserved heterogeneity is proposed and estimated.
Results indicate that completion hazard is significantly affected by individual
background characteristics, program-specific factors and labour market variables. The
expected wage upon completion significantly increases degree completion hazard while
the higher the individual's own earnings while studying, the lower the completion
hazard. However, the unemployment degree that students may expect to face upon graduation
does not, as expected, have a delaying impact on education completion.
I. Introduction
This paper analyses whether labour market conditions affect the completion time of
higher education of Danish high school graduates. Danish students take a relatively
longer time in completing higher education compared with students in other OECD
countries. For example, the average age at long-term (university) higher education
completion in Denmark is 29.4 years, compared to an average of 25.2 years in Holland.
1 A recent study by the Danish Employers Federation, Dansk Arbejdsgiverfor-
Thanks to Ronald G. Ehrenberg, Steve Bronars, Niels Westergaard-Nielsen and participants of the CLS
Workshop on Higher Education, Aarhus, June 1998, and to Anne Møller Danø, Helena Skyt Nielsen,
Michael Rosholm and other participants of the Rørvig workshop, April 2002 for useful comments. Use of
the data is made possible by financial support from the Danish National Research Foundation.
Mark Y. An was visiting the Economics Department, University of Aarhus, and the Center for Labour Market
and Social Research (CLS), Aarhus, at the start of this project.
1. OECD Education at a Glance, Education Indicators, 2001.