Essays in Labour and Education Economics

This thesis is comprised of three stand-alone papers. The first paper, "Learning from What: The Informational Value of Grades and Wages", explores how imperfect information about personal schooling ability and labor market productivity impacts college enrollment and career transitions. Using Brazilian data, I estimate a dynamic model of college and work decisions, where individuals update their beliefs about their abilities based on noisy signals from grades and wages. I find that a significant portion of the variability in wages and grades is due to gradually revealed ability components. Counterfactual simulations show that perfect information about abilities would increase college graduation rates by 6.2 percentage points and that the option to return to education after a period of experimentation in the labour markets plays an important role in providing information that fills this gap. The second paper, "The Role of Financial Aid for Low-Income Low-Achievers”, examines the impact of financial aid on low-income students. By analyzing eligibility discontinuities for financial aid, I estimate the effects of University loans and/or grants on students’ outcomes along their exam score distribution. Findings indicate that low-interest loans are more effective than full or partial grants in ensuring college completion for students from similar low-socioeconomic backgrounds. This effectiveness is attributed to loans acting as a commitment device, easing financial constraints while introducing a dropout penalty. The final paper, co-authored with researchers from the University of Essex and the University of Edinburgh, investigates the UK labour market during the COVID-19 pandemic. Using novel job search data from the UK Longitudinal Household Survey, we document how individuals adjust their job search in response to changing employment patterns. Workers shifted their search towards expanding occupations and industries, but non-employed workers remain more attached to their previous roles, and those with lower education are more likely to target declining occupations. Workers from declining occupations make fewer transitions to expanding fields, indicating that those on the labour market’s margins struggle more to transition away from declining jobs.