samlet årgang - Økonomisk Institut - Københavns Universitet

THE EFFECT OF LABOUR MARKET CONDITIONS ON HIGHER EDUCATION COMPLETION 95
Discrete Hazard Rate
1.0000
0.9000
0.8000
0.7000
0.6000
Short
0.5000
Medium
0.4000
0.3000
0.2000
0.1000
0.0000
Long
0 1 2 3 4 5 6 7 8 9
Year in Program
Figure 2. Kaplan-Meier Estimates of Hazard Rate By Program Type.
clear peak at 4 years, and a smaller peak at 8 (although the number of observations are
low in the range 7-8 years) while for long programs, the exit rate increases at 6 years
and stays constant at this higher-level thereafter.
VII. Estimation Results
Given the large differences in Kaplan-Meier hazard rates among the three types of
programs, in our actual model specification, we assume short, medium, and long programs
have different program-specific baseline hazard functions. Table 3 presents the
determinants of the completion hazard of four different model specifications. In Model
1, we consider the effect of student background characteristics, previous high
school type, program-specific factors and labour market variables. 11 In Model 2, we
omit previous high school type as this turns out to be a poor proxy for ability in (1) and
add instead the squared term to time-between programs. In Model 3, we further omit
cohabitation status and effect of small children, as these are potentially endogenous,
because it may be a selected group of students who choose to cohabit or have children.
Model 3 also relaxes the assumption that gender differences are captured only through
a shift in the intercept term and instead allows for gender-specific interactions in all
the covariates. Finally, in Model 4, we retain the gender-specific interactions and
11. In a previous version, we tried two different ways of capturing expected labour market conditions: first,
by averaging over all employed workers in the IDA 2% extract who have the same educational type as the
individual in any year, and second, by taking average of wages and unemployment degree of workers with
the same degree type as the individual in a given year but with less than 5 years accumulated tenure. The
second measure fits the data better for all models estimated and is the measure that is applied here,
suggesting that mainly early career prospects affect degree completion times.