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The Long-term Effects of Graduating from High School During a Recession: Bad Luck or Forced Opportunity?

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Abstract

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.

Suggested Citation

  • Audra J. Bowlus & Haoming Liu, 2003. "The Long-term Effects of Graduating from High School During a Recession: Bad Luck or Forced Opportunity?," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20037, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    • Handle: RePEc:uwo:hcuwoc:20037
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    File URL: https://ir.lib.uwo.ca/cgi/viewcontent.cgi?article=1039&context=economicscibc
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    Cited by:

    1. Summerfield, Fraser, 2014. "Labor Market Conditions, Skill Requirements and Education Mismatch," CLSSRN working papers clsrn_admin-2014-19, Vancouver School of Economics, revised 28 Apr 2014.
    2. Jiang, Dezhi, 2021. "Whose Investments in Higher Education Have Been Most Influenced by Labor Market Conditions in Recent Decades?," SocArXiv 83upm, Center for Open Science.

    More about this item

    Keywords

    earnings; education; business cycle;
    All these keywords.

    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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