The Long-Term Labor Market Consequences of Graduating from College in a Bad Economy

43 Pages Posted: 20 Apr 2005  

Lisa B. Kahn

Harvard University, Department of Economics; NBER

Date Written: September 12, 2006

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 college between 1979 and 1988 and are followed for 14 to 23 years after college graduation. I employ both national and state variation in economic conditions at time of college graduation to identify the effect. Because timing and location of college graduation could potentially be affected by economic conditions, I also instrument for the national unemployment rate usinf year of birth and for the state unemployment rate using year of birth and state of residence at age 14. I find large, negative wage effects to graduating in a worse economy which persist for the entire period studied. I find that cohorts who graduate in worse economies are in lower level occupations and have slightly higher educational attainment. Labor supply is unaffected.

JEL Classification: E32, J24, J31, J41

Suggested Citation

Kahn, Lisa B., The Long-Term Labor Market Consequences of Graduating from College in a Bad Economy (September 12, 2006). Available at SSRN: https://ssrn.com/abstract=702463 or http://dx.doi.org/10.2139/ssrn.702463

Lisa B. Kahn (Contact Author)

Harvard University, Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

NBER

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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