IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp16746.html

Recessions and the Labor Market Returns to Cognitive and Social Skills

Author

Listed:
  • Frisvold, David E.

    (University of Iowa)

  • Kim, Sun Hyung

    (Shanghai University)

Abstract

Although recessions negatively affect labor market outcomes, we find that individuals with greater cognitive skills have been less affected by recessions since 2000 compared to those in the 1980s and 1990s. This result occurs despite a decrease in the returns to cognitive skills over the last few decades, on average. We argue that changes in the provision of employer-paid training can help explain the relative return to cognitive skills during recent recessions due to lower training costs and enhanced labor productivity. Consistent with this, we find that firms provide more training to workers with higher cognitive skills during post-2000 recessions.

Suggested Citation

  • Frisvold, David E. & Kim, Sun Hyung, 2024. "Recessions and the Labor Market Returns to Cognitive and Social Skills," IZA Discussion Papers 16746, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp16746
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp16746.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Benner, Niklas & Heuer, Felix & Kamb, Rebecca & Storm, Eduard, 2025. "Do economic crises reshape the skill content of Jobs? Evidence from organizational changes in the post-pandemic era," Ruhr Economic Papers 1195, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Pietro Giorgio Lovaglio & Mattia Riussi, 2025. "How is Labour Demand Changing Across European Regions in the Post-COVID-19 Era," International Regional Science Review, , vol. 48(5-6), pages 524-575, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Choi, Eleanor Jawon & Choi, Jaewoo & Son, Hyelim, 2020. "The long-term effects of labor market entry in a recession: Evidence from the Asian financial crisis," Labour Economics, Elsevier, vol. 67(C).
    2. Jaison R. Abel & Richard Deitz, 2017. "Underemployment in the Early Careers of College Graduates following the Great Recession," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 149-181, National Bureau of Economic Research, Inc.
    3. Clémentine Garrouste & Mathilde Godard, 2016. "The lasting health impact of leaving school in a bad economy : Britons in the 1970s recession," Post-Print hal-01408637, HAL.
    4. Sirola, Nina, 2023. "Going beyond the call of duty under conditions of economic threat: Integrating life history and temporal dilemma perspectives," Organizational Behavior and Human Decision Processes, Elsevier, vol. 179(C).
    5. Johanna Catherine Maclean, 2016. "Does Leaving School in an Economic Downturn Persistently Affect Body Weight? Evidence from Panel Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(1), pages 122-148, January.
    6. Stenberg, Anders & Westerlund, Olle, 2016. "Flexibility at a cost – Should governments stimulate tertiary education for adults?," The Journal of the Economics of Ageing, Elsevier, vol. 7(C), pages 69-86.
    7. Emmanuel Saez & Benjamin Schoefer & David Seim, 2019. "Payroll Taxes, Firm Behavior, and Rent Sharing: Evidence from a Young Workers' Tax Cut in Sweden," American Economic Review, American Economic Association, vol. 109(5), pages 1717-1763, May.
    8. Cho, Yoon Y. & Lee, Soohyung, 2021. "How to Improve Worker-Firm Matching: Evidence from a Temporary Foreign Worker Market," IZA Discussion Papers 14328, IZA Network @ LISER.
    9. Brian Clark & Clément Joubert & Arnaud Maurel, 2017. "The career prospects of overeducated Americans," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.
    10. Cockx, Bart & Ghirelli, Corinna, 2016. "Scars of recessions in a rigid labor market," Labour Economics, Elsevier, vol. 41(C), pages 162-176.
    11. Liu, Kai & Salvanes, Kjell G. & Sørensen, Erik Ø., 2016. "Good skills in bad times: Cyclical skill mismatch and the long-term effects of graduating in a recession," European Economic Review, Elsevier, vol. 84(C), pages 3-17.
    12. Ghazala Azmat & Katja Maria Kaufmann, 2024. "Formation of College Plans: Expected Returns, Preferences, and Adjustment Process," Journal of the European Economic Association, European Economic Association, vol. 22(2), pages 669-711.
    13. Garloff, Alfred & Roth, Duncan, 2016. "Regional age structure and young workers' wages," IAB-Discussion Paper 201606, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    14. Hélène Couprie & Xavier Joutard, 2017. "Atypical Employment and Prospects of the Youth on the Labor Market in a Crisis Context," Thema Working Papers 2017-08, THEMA (Théorie Economique, Modélisation et Applications), CY Cergy-Paris University, ESSEC and CNRS.
    15. Jie Gong & Ang Sun & Zhichao Wei, 2018. "Choosing the Pond: On-the-Job Experience and Long-Run Career Outcomes," Management Science, INFORMS, vol. 64(2), pages 860-872, February.
    16. Bednar, Steven & Gicheva, Dora, 2013. "Tax benefits for graduate education: Incentives for whom?," Economics of Education Review, Elsevier, vol. 36(C), pages 181-197.
    17. Jeffrey Clemens & Michael R. Strain, 2023. "How important are minimum wage increases in increasing the wages of minimum wage workers?," Contemporary Economic Policy, Western Economic Association International, vol. 41(4), pages 594-612, October.
    18. Hande Inanc, "undated". "Youth Unemployment in the Second Year of the COVID-19 Pandemic," Mathematica Policy Research Reports ab6448d08be04ebc8b7570ee7, Mathematica Policy Research.
    19. Brian Bell & Anna Bindler & Stephen Machin, 2018. "Crime Scars: Recessions and the Making of Career Criminals," The Review of Economics and Statistics, MIT Press, vol. 100(3), pages 392-404, July.
    20. Aksoy, Cevat Giray & Poutvaara, Panu & Schikora, Felicitas, 2023. "First time around: Local conditions and multi-dimensional integration of refugees," Journal of Urban Economics, Elsevier, vol. 137(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • 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
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp16746. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Fallak (email available below). General contact details of provider: https://edirc.repec.org/data/izaaalu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.