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Labor Market Shocks on College Students and Recent Graduates

Paper Session

Friday, Jan. 6, 2023 2:30 PM - 4:30 PM (CST)

Hilton Riverside, Steering
Hosted By: Labor and Employment Relations Association
  • Chair: Jesse Rothstein, University of California-Berkeley

Skills, Majors and Jobs: Does Higher Education Respond

Johnathan G. Conzelmann
University of North Carolina-Chapel Hill
Steven W. Hemelt
University of North Carolina-Chapel Hill
Brad Hershbein
W.E. Upjohn Institute for Employment Research
Shawn M. Martin
University of Michigan
Andrew Simon
University of Chicago


The U.S. labor market increasingly rewards skilled workers. Despite growing work on the evolution of skill demand, little is known about the extent to which college students and postsecondary institutions respond and adapt to these shifts in skill demand. This margin of response is crucial: for the nearly two-thirds of workers who attend college, the most direct way for individuals to build specific skills is through their choice of curriculum and field of study. In this paper we quantify the magnitude and nature of the postsecondary response to shifts in labor market demand at nearly all undergraduate programs at four-year colleges and universities in the U.S. from 2010 to 2017. Our measure of labor demand combines the near-universe of online job ads with information on the geographic locations of alumni from a popular professional networking platform. We use long-difference models and a shift-share instrument constructed from the relevance of changes in industry employment across geography for different majors to isolate plausibly exogenous changes in field-specific labor demand. Our instrumental variables estimates suggest that undergraduate degrees respond to changes in skill demand, with an elasticity slightly less than one, but with considerable variation across fields. In ongoing work, we examine sensitivity to lag structure and additionally investigate course-taking at the department and individual margins, as well.

The Great Recession and the Widening Income Gap Between Alumni of Elite and Less Selective Universities

Russell Weinstein
University of Illinois-Urbana-Champaign


Using mobility report card data, I show the income gap between alumni of elite and less selective universities widened for cohorts graduating during the Great Recession. This gap widens for students with top-income-quintile parents, and less systematically for lower-income students. I evaluate potential mechanisms, including student characteristics that may be correlated with resilience. Using a unique dataset of recruiting strategies for prestigious firms, I highlight one channel through which university selectivity may have a causal impact: high-wage firms concentrated their recruiting at elite universities during the recession. The results are informative for policies increasing lower-income students' representation at selective universities.

Limited Supply and Lagging Enrollment: Production Technologies and Enrollment Changes at Community Colleges during the Pandemic

Diane Whitmore Schanzenbach
Northwestern University
Sarah Turner
University of Virginia


Weak labor markets typically lead young workers to invest in skills. High unemployment during COVID diverged from prior downturns: enrollment at community colleges dropped by 9.5 percent between 2019 and 2020, with the drop larger among men. COVID disruptions generated supply-side impacts on courses of study requiring significant capital and "hands on" experiential learning, particularly programs that deliver of assembly, repair and maintenance (ARM) skills. Community colleges that had relative concentrations of credentials in ARM fields pre-pandemic experienced relatively large enrollment declines. The decline in ARM enrollment explains nearly all the difference in enrollment declines by gender during COVID.

Joseph G. Altonji
Yale University
Celeste K. Carruthers
University of Tennessee
JEL Classifications
  • J2 - Demand and Supply of Labor
  • J4 - Particular Labor Markets