MPIDR Working Paper

Education and union formation as simultaneous processes in Italy and Spain

Abstract

In recent times, both the time spent on education and the age at first union formation have significantly increased in Italy and Spain. In this paper, we provide empirical evidence of the endogeneity of the two processes. We use Panel data (European Community Household Panel), which provide detailed standardised information for both countries about education and training processes as a well as household formation. The effect of unobservable characteristics affecting the two processes at the same time has been controlled for, using simultaneous hazard modelling. On the one hand, the exit from the educational system increases the risk of entering the first union. On the other hand, there exist individual unobserved characteristics that influence the occurrence of the two processes simultaneously. If these characteristics are not controlled for, the effect of a completed education on union formation becomes biased upward.