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.
Stuart, Bryan A.
"The Long-Run Effects of Recessions on Education and Income."
American Economic Journal: Applied Economics,
Business Fluctuations; Cycles
Analysis of Education
Returns to Education
Human Capital; Skills; Occupational Choice; Labor Productivity
Wage Level and Structure; Wage Differentials