The Long-Run Effects of Recessions on Education and Income
American Economic Journal: Applied Economics
vol. 14,
no. 1, January 2022
(pp. 42-74)
Abstract
This paper examines the long-run effects of the 1980–1982 recession on education and income. Using confidential census data, I estimate difference-in-difference regressions that exploit variation across counties in recession severity and across cohorts in age at the time of the recession. For individuals age 0–10 in 1979, a 10 percent decrease in earnings per capita in their county of birth reduces four-year college degree attainment by 15 percent and earnings in adulthood by 5 percent. Simple calculations suggest that in aggregate, the 1980–1982 recession led to 1.3–2.8 million fewer college graduates and $66–$139 billion less earned income per year.Citation
Stuart, Bryan A. 2022. "The Long-Run Effects of Recessions on Education and Income." American Economic Journal: Applied Economics, 14 (1): 42-74. DOI: 10.1257/app.20180055Additional Materials
JEL Classification
- E32 Business Fluctuations; Cycles
- I21 Analysis of Education
- I26 Returns to Education
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
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