Disadvantaged communities are often geographically segregated from opportunities for employment and higher education. Increasing access can result in substantial welfare gains, but it can also affect the choice faced by young adults between investing in higher education or working for pay. We evaluate the introduction of bus services to Arab towns in Israel. These services substantially and differentially increased the disadvantaged population’s access either to work only or to work and higher education opportunities. Exploiting the variation that different bus line connections have created in the cost of schooling, we find that young adults’ responses are consistent with a tradeoff between investing in higher education and working for pay. For females, under certain circumstances, there is a simultaneous decrease in both labor market and educational attainment outcomes. We argue that this is due to a combination of a household income effect and social stigma that is associated with female participation in the labor force. Our results demonstrate the importance of accounting for potential reductions in educational attainment when expanding work opportunities for disadvantaged communities and show that traditional barriers can play a large role in female integration into the labor market.
|Translated title of the contribution||Connecting Disadvantaged Communities to Work and Higher Education Opportunities: Evidence from Public Transportation Penetration to Arab Towns in Israel|
|Number of pages||18|
|State||Published - Jan 2021|