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Caught in the Cycle: Economic Conditions at Enrolment and Labour Market Outcomes of College Graduates

Author

Listed:
  • Alena Bičáková
  • Guido Matias Cortes
  • Jacopo Mazza

Abstract

We show that cohorts of male graduates who start college during worse economic times earn higher average wages than those who start during better times. This is not explained by differences in selection into employment, economic conditions at graduation, or field of study choices. Graduates who enrol in bad times are not more positively selected based on their high-school outcomes, but they achieve higher college grades and earn higher wages conditional on their grades. Patterns for female graduates are similar, though less robust. Our results suggest that individuals who enrol during downturns exert more effort during their studies.

Suggested Citation

  • 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.
    • Handle: RePEc:oup:econjl:v:131:y:2021:i:638:p:2383-2412.
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    File URL: http://hdl.handle.net/10.1093/ej/ueab003
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    Citations

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    Cited by:

    1. David Binder & Nora Haag & Bianca Thaler, 2025. "Study or Work? The Impact of Social Background and Unemployment Rates on the Decision of Vocational High School Graduates in Austria," Social Inclusion, Cogitatio Press, vol. 13.
    2. Alena Bicakova & Guido Matias Cortes & Kelly Foley & Jacopo Mazza & Peter McHenry, 2025. "Unpacking the Countercyclicality of Post-Secondary Enrollment in the United States," CERGE-EI Working Papers wp795, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Arnup, Jessica L. & Black, Nicole & Johnston, David W., 2024. "Expecting less in hard times: How the state of the economy influences students’ educational expectations," Economics of Education Review, Elsevier, vol. 103(C).
    4. Bičáková, Alena & Cortes, Guido Matias & Mazza, Jacopo, 2023. "Make your own luck: The wage gains from starting college in a bad economy," Labour Economics, Elsevier, vol. 84(C).
    5. Chiara Cavaglia & Sandra McNally, 2025. "Young people, human capital investment and the Great Recession," CVER Research Papers 042, Centre for Vocational Education Research.
    6. Blank, D. Brian & Hadley, Brandy, 2021. "When CEOs adapt: An investigation of manager experience, policy and performance following recessions," Journal of Corporate Finance, Elsevier, vol. 71(C).
    7. Leibing, Andreas, 2026. "Skill Substitution, Expectations, and the Business Cycle," EconStor Preprints 335943, ZBW - Leibniz Information Centre for Economics.
    8. Ghazala Azmat & Jack Britton, 2024. "Labour Market Returns to Higher Education," Sciences Po Economics Publications (main) hal-04709561, HAL.
    9. Richard J. Paulsen, 2022. "Arts majors and the Great Recession: a cross-sectional analysis of educational choices and employment outcomes," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(4), pages 635-658, December.

    More about this item

    JEL classification:

    • 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
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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