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Which degrees do students prefer during recessions?

Author

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  • Sofoklis Goulas

    (Stanford University)

  • Rigissa Megalokonomou

    (The University of Queensland)

Abstract

We examine how changes in the unemployment rate affect demand for tertiary education, demand for different fields of university study and degrees’ admission thresholds. We use panel data for applications submitted to every undergraduate program in Greece that span seven rounds of admission cohorts combined with a degree-specific job insecurity index, and time series on youth (ages 18–25) unemployment. We find that degree- and major-specific job insecurity turns applicants away from degrees and majors that are associated with poor employment prospects. Results indicate that the steep increase in the unemployment rate that started in 2009 is associated with an increase in the number of university applicants. The effect is heterogeneous across fields, with an increase in the demand for degrees in Psychology as well as for entrance to Naval, Police, and Military Academies, and a decrease in the demand for degrees in Business and Management. We also find that the business cycle changes degrees’ admission thresholds by affecting their popularity.

Suggested Citation

  • Sofoklis Goulas & Rigissa Megalokonomou, 2019. "Which degrees do students prefer during recessions?," Empirical Economics, Springer, vol. 56(6), pages 2093-2125, June.
    • Handle: RePEc:spr:empeco:v:56:y:2019:i:6:d:10.1007_s00181-018-1418-7
    DOI: 10.1007/s00181-018-1418-7
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    Cited by:

    1. Bizopoulou, Aspasia & Megalokonomou, Rigissa & Simion, Stefania, 2022. "Do Second Chances Pay Off? Evidence from a Natural Experiment with Low-Achieving Students," IZA Discussion Papers 15139, Institute of Labor Economics (IZA).
    2. Alena Bičáková & Guido Matias Cortes & Jacopo Mazza, 2021. "Caught in the Cycle: Economic Conditions at Enrolment and Labour Market Outcomes of College Graduates," The Economic Journal, Royal Economic Society, vol. 131(638), pages 2383-2412.
    3. Victor Lavy & Rigissa Megalokonomou, 2019. "Persistency in Teachers’ Grading Bias and Effects on Longer-Term Outcomes: University Admissions Exams and Choice of Field of Study," NBER Working Papers 26021, National Bureau of Economic Research, Inc.
    4. Aspasia Bizopoulou & Rigissa Megalokonomou & Stefania Simion, 2022. "Do Second Chances Pay Off?," Bristol Economics Discussion Papers 22/762, School of Economics, University of Bristol, UK.
    5. Silke Anger & Malte Sandner & Alexander M. Danzer & Axel Plünnecke & Olaf Köller & Enzo Weber & Samuel Mühlemann & Harald Pfeifer & Bernhard Wittek, 2020. "School Closures, Lack of Apprenticeships, No Jobs: Generation without a Future?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(09), pages 03-24, September.
    6. Aspasia Bizopoulou & Rigissa Megalokonomou & Stefania Simion, 2023. "Do Second Chances Pay Off? Evidence from a Natural Experiment with Low-Achieving Students," Monash Economics Working Papers 2023-05, Monash University, Department of Economics.

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    More about this item

    Keywords

    Demand for education; University major; Unemployment; Job insecurity; Admission thresholds;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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