 Predicted Earnings Losses from Graduating during COVID-19Derek Messacar, Tomasz Handler and Marc Frenette Canadian Public Policy, 2021, vol. 47, issue 2, 301-315 Abstract: Poor labour market conditions at the start of a worker’s career can result in earnings losses for many years. The 2021 cohort of Canadian high school and post-secondary students have seen employment prospects diminish amid economic lockdowns to contain the spread of coronavirus disease 2019 (COVID-19). The goal of this article is to predict earnings losses for this cohort. We use Census of Population data to show that a 1 percent increase in unemployment at the time of graduation leads to a 1.5–4 percent average decrease in earnings. Then, using unemployment rate forecasts from various sources, we predict how this year’s graduating class is expected to fare. Our approach assumes previous recessions are informative about the effects of the current recession. We estimate that a typical 2021 graduate loses 5–12 percent of the amount they would have earned over the first few years if the pandemic had not occurred. Keywords: economic lockdown; education; graduation; labour market earnings; recession; unemployment rate (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpp:issued:v:47:y:2021:i:2:p:301-315 Ordering information: This journal article can be ordered from Access Statistics for this article Canadian Public Policy is currently edited by Prof. Mike Veall More articles in Canadian Public Policy from University of Toronto Press University of Toronto Press Journals Division 5201 Dufferin Street Toronto, Ontario, Canada M3H 5T8. |
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