Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success

Joseph Altonji, Lisa Kahn and Jamin Speer

No 20531, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze the early labor market outcomes of U.S. college graduates from the classes of 1974 to 2011, as a function of the economic conditions into which they graduated. We have three main findings. First, poor labor market conditions substantially disrupt early careers. A large recession at time of graduation reduces earnings by roughly 10% in the first year, for the average graduate. The losses are driven partially by a reduced ability to find employment and full-time work and partially by a roughly 4% reduction in hourly wage rates. Second, these effects differ by field of study. Those in majors with typically higher earnings experience significantly smaller declines in most labor market outcomes measured. As a result, the initial earnings and wage gaps across college majors widen by almost a third and a sixth, respectively, for those graduating into a large recession. Most of these effects fade out over the first 7 years. Those in higher paying majors are also slightly less likely to obtain an advanced degree when graduating into a recession, consistent with their relative increase in opportunity cost. Our third set of results focuses on a recent period that includes the Great Recession. Early impacts on earnings are much larger than what we would have expected given past patterns and the size of the recession, in part because of a large increase in the cyclical sensitivity of demand for college graduates. The effects also differ much less by field of study than those of prior recessions.

JEL-codes: J24 J31 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-lab and nep-lma
Note: LS
References: Add references at CitEc
Citations: View citations in EconPapers (34)

Published as Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success , Joseph G. Altonji, Lisa B. Kahn, Jamin D. Speer. in Labor Markets in the Aftermath of the Great Recession , Card and Mas. 2016
Published as Joseph G. Altonji & Lisa B. Kahn & Jamin D. Speer, 2016. "Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success," Journal of Labor Economics, vol 34(S1), pages S361-S401.

Downloads: (external link)
http://www.nber.org/papers/w20531.pdf (application/pdf)

Related works:
Journal Article: Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success (2016)
Chapter: Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:20531

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w20531

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().