Seminar by Roberto Nisticò

Sala Seminari – Ist floor, Palazzo Levi Cases, Via del Santo 33 - 12.30


The Effect of Parental Job Loss on Child School Dropout: Evidence from the Occupied Palestinian Territories

by Roberto Nisticò, Università Federico II di Napoli (presenter) and Michele Di Maio

This paper explores how negative economic shocks affect household schooling decisions in the context of a developing country. In particular, we study the effect of parental job loss on child school dropout using data from the Occupied Palestinian Territories (OPT). Our analysis focuses on Palestinian workers employed in Israel during the Second Intifada, a group of workers for whom job separation is arguably involuntary and determined by the intensity of the Israeli-Palestinian conflict. To identify the effect of job loss, we employ an instrumental
variable strategy and use the household head exposure to conflict as a plausibly exogenous source of variation in the employment status.
Results show that parental job loss increases child school dropout probability by 9 percentage points. The effect varies with the gender and the academic ability of the child, with the level of parental education, and the number of children in the household. We find evidence suggesting that the effect operates through the job loss-induced reduction in household income. We exclude alternative mechanisms such as family disruption or household relocation.