The Short- and Long-Term Career Effects of Graduating in a Recession
Philip Oreopoulos,
Till von Wachter and
Andrew Heisz
American Economic Journal: Applied Economics, 2012, vol. 4, issue 1, 1-29
Abstract:
This paper analyzes the magnitude and sources of long-term earnings declines associated with graduating from college during a recession. Using a large longitudinal university-employer-employee dataset, we find that the cost of recessions for new graduates is substantial and unequal. Unlucky graduates suffer persistent earnings declines lasting ten years. They start to work for lower paying employers, and then partly recover through a gradual process of mobility toward better firms. We document that more advantaged graduates suffer less from graduating in recessions because they switch to better firms quickly, while earnings of less advantaged graduates can be permanently affected by cyclical downgrading. (JEL E32, I23, J22, J23, J31)
JEL-codes: E32 I23 J22 J23 J31 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/app.4.1.1
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