If the age at which students can dropout of high school is increased from 16 to 18, what happens to production possibilities and unemployment rates?

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I don't think production rates would be much affected by the drop-out age change. Only about 1% of 16-17 year olds work full time currently in the U.S. The majority of jobs that these age ranges hold are part-time service or domestic jobs, such as in the food service industry...

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I don't think production rates would be much affected by the drop-out age change. Only about 1% of 16-17 year olds work full time currently in the U.S. The majority of jobs that these age ranges hold are part-time service or domestic jobs, such as in the food service industry or child care. 18-25 year olds also heavily represent part-time workers in the service industry. The majority of 16-17 year olds working part-time (who make up the majority of 16-17 workers) are still in school. As such, productiveness within the workforce would see a minimal change if the drop-out rate changed. Unemployment rates may decline to an extent in the long-term due to an increase in the education level of workers as 16-17 year olds stay in school and receive their high school diplomas.

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You can argue that your production possibilities curve would move left.  You can say that this is because you have all these people who could have been working but are now back in school.

However, you can argue that your PPC would actually move right in the long term because more education will make your work force more productive.  I'd take either answer if I were asking that question.

Unemployment rates would likely fall because you would have fewer teens in the labor force -- teens who are likely to have high rates of unemployment because they lack skills.

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