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

Lisa B. Kahn

Labour Economics, 2010, vol. 17, issue 2, pages 303-316

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.

Keywords: Recession; College; graduates; Careers (search for similar items in EconPapers)
Date: 2010
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