Leveling the Peaks and Troughs of the Demographic Cycle: An Application to School Enrollment Rates: A Comment; Reply

New evidence is presented that rejects Wachter and Wascher's (1984) timing hypothesis of the effect of the demographic cycle on schooling. The timing hypothesis is formalized in the context of a statistical model, and it is argued that this hypothesis implies certain restrictions on the parameters of the model. Using more detailed data than those used by Wachter and Wascher, the model is estimated, the restrictions tested, and the timing hypothesis rejected. Wachter and Wascher have enhanced the understanding of the effects of the demographic cycle on individual behavior by showing that individuals do not passively suffer the adverse consequences of a baby boom on their economic well-being, but they alter their investment in schooling in response to such a demographic phenomenon. In a reply, Wachter and Wascher note that they find the results on age of completion obtained by Falaris and Peters puzzling and unconvincing. Falaris and Peters' hypotheses are an overly restrictive interpretation of the 1984 paper.