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Title: Strategic or scarred? Disparities in college enrollment and dropout response to macroeconomic conditions

Citation Type: Miscellaneous

Publication Year: 2023

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Abstract: Recessions create enduring effects, or scars, on young individuals' careers, notably when they occur around critical periods such as high school graduation and college enrollment. I investigate how educational choices amplify or mitigate these scarring effects across income levels. Low-income young people face dual scarring effects: increased likelihood of dropping out of college and enduring negative labor market entry effects. High-income young people strategically evade these repercussions, delaying labor market entry through timely college enrollment during economic downturns. I quantify the lifetime repercussions of experiencing a recession during these critical phases. The poorest individuals endure a 40% reduction in lifetime consumption if a recession occurs while they are enrolled in college. A recession that occurs around the time of high school graduation hinders the college attendance of the middle-to-low-income group, causing a 24% lifetime consumption loss.

Url: https://nadimelayan.github.io/MyWebsite/JMP_Nadim.pdf

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Authors: Elayan Balagú, Nadim

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Data Collections: IPUMS CPS

Topics: Education, Labor Force and Occupational Structure, Work, Family, and Time

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