The Effects of Graduating from College During a Recession on Living Standards

11 Pages Posted: 14 May 2020

See all articles by Daiji Kawaguchi

Daiji Kawaguchi

University of Tokyo - Graduate School of Economics

Ayako Kondo

University of Tokyo - Institute of Social Science

Date Written: January 2020

Abstract

Graduating from college during a recession has persistent negative effects on labor‐market outcomes. This study assesses the welfare impact of a recession at entry by analyzing family formation behaviors and asset holdings. Scrutiny of the National Longitudinal Survey of Youth 1979 (NLSY79) reveals that despite a decline in hourly wages, business cycle conditions at entry to the labor market do not affect family formation, car or home ownership, or net asset holdings in the long run. Evidence suggests that individuals who graduate in bad times tend to move to states with lower living costs to secure living standards.

JEL Classification: E21

Suggested Citation

Kawaguchi, Daiji and Kondo, Ayako, The Effects of Graduating from College During a Recession on Living Standards (January 2020). Economic Inquiry, Vol. 58, Issue 1, pp. 283-293, 2020, Available at SSRN: https://ssrn.com/abstract=3596433 or http://dx.doi.org/10.1111/ecin.12835

Daiji Kawaguchi (Contact Author)

University of Tokyo - Graduate School of Economics ( email )

Tokyo
Japan

Ayako Kondo

University of Tokyo - Institute of Social Science ( email )

Hongo 7-3-1
Tokyo, TOKYO 113-0033
Japan

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