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Wages, Hours, and the School-to-Work Transition: The Consequences of Leaving School in a Recession for Less-Educated Men

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  • Speer Jamin D.

    () (Department of Economics, Fogelman College of Business and Economics, University of Memphis, 3675 Central Avenue, Memphis, Tennessee 38152, USA)

Abstract

Using the NLSY’s weekly work history data to precisely measure labor market outcomes and the school-to-work transition, I document severe but short-lived effects of leaving school in a recession for men with 9–12 years of education. I find significant effects of entry labor market conditions on wages, job quality, and the transition time from school to work. In contrast to published evidence on more educated workers, I also find large effects on work hours on both the extensive and the intensive margins. When workers leave high school in a recession, they take substantially longer to find a job, earn lower wages, and work fewer full-time weeks and more part-time weeks. A 4-point rise in the initial unemployment rate leads to an increase in the school-to-work transition time of 9 weeks, a 16% decline in year-one average wage, a 28% fall in hours worked in the first year, and a 45% decline in first-year earnings. However, effects of entry conditions are not persistent and are largely gone after the first year.

Suggested Citation

  • Speer Jamin D., 2016. "Wages, Hours, and the School-to-Work Transition: The Consequences of Leaving School in a Recession for Less-Educated Men," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(1), pages 97-124, January.
  • Handle: RePEc:bpj:bejeap:v:16:y:2016:i:1:p:97-124:n:13
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    References listed on IDEAS

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    1. Richard Blundell & Monica Costa Dias & Costas Meghir & Jonathan Shaw, 2016. "Female Labor Supply, Human Capital, and Welfare Reform," Econometrica, Econometric Society, vol. 84, pages 1705-1753, September.
    2. Hershbein Brad J., 2012. "Graduating High School in a Recession: Work, Education, and Home Production," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-32, January.
    3. Yuji Genda & Ayako Kondo & Souichi Ohta, 2010. "Long-Term Effects of a Recession at Labor Market Entry in Japan and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
    4. Greenwood, Michael J, 1975. "Research on Internal Migration in the United States: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(2), pages 397-433, June.
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    Cited by:

    1. repec:eee:labeco:v:53:y:2018:i:c:p:75-96 is not listed on IDEAS
    2. Bryan A. Stuart, 2017. "The Long-Run Effects of Recessions on Education and Income," Working Papers 17-52, Center for Economic Studies, U.S. Census Bureau.
    3. Cockx, Bart & Ghirelli, Corinna, 2016. "Scars of recessions in a rigid labor market," Labour Economics, Elsevier, vol. 41(C), pages 162-176.
    4. Bart Cockx, 2016. "Do youths graduating in a recession incur permanent losses?," IZA World of Labor, Institute of Labor Economics (IZA), pages 281-281, August.
    5. Engdahl, Mattias & Godard, Mathilde & Nordström Skans, Oskar, 2018. "Early labor market prospects and family formation," Working Paper Series 2018:25, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. repec:bla:ecinqu:v:55:y:2017:i:3:p:1370-1387 is not listed on IDEAS
    7. repec:bpj:bejeap:v:17:y:2017:i:2:p:37:n:5 is not listed on IDEAS

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