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The long-term labor market consequences of graduating from college in a bad economy

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Listed author(s):
  • Kahn, Lisa B.

Abstract

This paper studies the labor market experiences of white-male college graduates as a function of economic conditions at time of college graduation. I use the National Longitudinal Survey of Youth whose respondents graduated from college between 1979 and 1989. I estimate the effects of both national and state economic conditions at time of college graduation on labor market outcomes for the first two decades of a career. Because timing and location of college graduation could potentially be affected by economic conditions, I also instrument for the college unemployment rate using year of birth (state of residence at an early age for the state analysis). I find large, negative wage effects of graduating in a worse economy which persist for the entire period studied. I also find that cohorts who graduate in worse national economies are in lower-level occupations, have slightly higher tenure and higher educational attainment, while labor supply is unaffected. Taken as a whole, the results suggest that the labor market consequences of graduating from college in a bad economy are large, negative and persistent.

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File URL: http://www.sciencedirect.com/science/article/pii/S0927-5371(09)00101-8
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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 17 (2010)
Issue (Month): 2 (April)
Pages: 303-316

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Handle: RePEc:eee:labeco:v:17:y:2010:i:2:p:303-316
Contact details of provider: Web page: http://www.elsevier.com/locate/labeco

Keywords: Recession College graduates Careers;

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  1. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2006. "The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates," NBER Working Papers 12159, National Bureau of Economic Research, Inc.
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  15. Rosella Gardecki & David Neumark, 1998. "Order from Chaos? The Effects of Early Labor Market Experiences on Adult Labor Market Outcomes," ILR Review, Cornell University, ILR School, vol. 51(2), pages 299-322, January.
  16. Evangelos M. Falaris & H. Elizabeth Peters, 1992. "Schooling Choices and Demographic Cycles," Journal of Human Resources, University of Wisconsin Press, vol. 27(4), pages 551-574.
  17. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
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  20. Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-1260, December.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. We Are The Lost Economic Generation
    by Seth Mason in Ecominoes on 2012-03-23 12:00:00
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    by noreply@blogger.com (Seth Mason) in Ecominoes on 2013-02-22 03:41:00
  4. The last decade was a historically awful time to enter the job market
    by Emily Badger in Ezra Klein's Wonkblog on 2014-03-18 12:45:14
  5. The Fate of the Overeducated and Underemployed
    by Jordan Weissmann in Moneybox on 2014-06-03 22:11:00
  6. Baristas of the world unite: Why college grads may be stuck at Starbucks even longer than they thought
    by Matt O'Brien in Wonkblog on 2014-11-19 16:44:27
  7. How Broke Are Millennials? This Broke.
    by Jordan Weissmann in Moneybox on 2014-12-08 18:53:00
  8. Massachusetts Just Banned Companies From Asking Job Applicants How Much They Make
    by Jordan Weissmann in Moneybox on 2016-08-02 20:56:50
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