This paper examines whether local labor market conditions at the time of high school graduation have long-term effects on wages. We find that a higher unemployment rate raises the probability of staying in school after finishing high school of white males, but reduces that of black males. A higher unemployment rate is also found to have a negative and lasting impact on the wages of white males who directly enter the workforce after graduating from high school. The main impetus of these lower wages is a tendency to accumulate less experience over the same time horizon. Thus, for most individuals graduating during a recession represents bad luck. However, for some the forced opportunity of additional years of education results in higher earnings levels.
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Length: Date of creation: 2003 Date of revision: Handle: RePEc:uwo:hcuwoc:20037
Contact details of provider: Postal: CIBC Human Capital and Productivity Project, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2 Phone: 519-661-2111 Ext.85228 Web page: http://economics.uwo.ca/econref/WorkingPapers/
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Find related papers by JEL classification: J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
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