Panel Paper: A Lost Generation? The Impact of High Unemployment Rates At College Graduation On Long-Term Earnings

Friday, November 8, 2013 : 1:15 PM
Thomas Salon (Washington Marriott)

*Names in bold indicate Presenter

Molly Dahl1, Thomas DeLeire2 and Jonathan Schwabish1, (1)Congressional Budget Office, (2)Georgetown University
We examine the effect of graduation from college in a year of high unemployment on the long-run earnings of men and women. We use longitudinal administrative earnings data for a large sample of men and women who graduated from college between 1979 and 1994 from the 1996 Survey of Income and Program Participation – Social Security Administration (SIPP-SSA) matched data file. Graduating during a period of relatively high unemployment has a long-term effect on the earnings of both men and women. In particular, initial earnings losses associated with a 1 percentage point increase in the unemployment rate range from between 4 and 7 percent for men and from between 3 and 5 percent for women. Ten years after graduation those losses decline by about half for men.  Similar results are found for all women with at least a bachelor’s degree.  Restricting to those women with a bachelor’s degree only (no post-graduate degree), the initial declines in earnings do not diminish at all.  If anything, they increase.