The Long-Run Effects of Recessions on Education and Income
Working Papers from U.S. Census Bureau, Center for Economic Studies
This paper examines the long-run effects of the 1980-1982 recession on education and income. Using confidential Census data, I estimate generalized difference-in-differences regressions that exploit variation across counties in the severity of the recession and across cohorts in age at the time of the recession. I find that children born in counties with a more severe recession are less likely to obtain a college degree and, as adults, earn less income and experience higher poverty rates. The negative effects on college graduation are most severe and essentially constant for individuals age 0-13 in 1979, suggesting that the underlying mechanisms are a decline in childhood human capital or a long-term decline in parental resources to pay for college. I find little evidence that states with more generous or more progressive transfer systems mitigated these long-run effects. The magnitude of my estimates and the large number of affected individuals suggest that the 1980-1982 recession depresses aggregate economic output today.
Keywords: human capital development; income; education; recessions (search for similar items in EconPapers)
JEL-codes: E32 I20 I30 J13 J24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-his, nep-mac and nep-pke
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https://www2.census.gov/ces/wp/2017/CES-WP-17-52.pdf First version, 2017 (application/pdf)
Working Paper: The Long-Run Effects of Recessions on Education and Income (2019)
Working Paper: The Long-Run Effects of Recessions on Education and Income (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:17-52
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