The Great Recession and shifting patterns of college effects for young men. (February 2019) - Curry, Matthew
Highlights: College effects for young men differ across economic context and the propensity to complete college. For low-propensity men, recessionary contexts increased the effects of college on employment and earnings, but not on wages. Among high-propensity individuals, college effects on wages increased during recessionary contexts. Results are consistent with labor queues, where highly ranked workers displace lower ranked workers when jobs are scarce. Abstract: Economic recessions have heterogeneous effects, with the worst consequences often disproportionately concentrated among workers with little education. This suggests an increase in the effects of college during recessionary contexts. Using panel data from the U.S. before and during the Great Recession, I employ a non-parametric multilevel propensity score method to assess whether the estimated effects of college completion for young men were sensitive to the economic context they encountered. Results suggest that returns to college in terms of earnings, employment, and wages shifted across economic contexts, but that they moved in opposing directions for advantaged versus disadvantaged young men. Consistent with job competition theory, recessions seem to increase college effects on wages most for advantaged young men, while increasing college effects on employment most for the less advantaged. Therefore, any change in the value of college for young men during the Great Recession was dependent both on which specific outcome was being considered and on observable precollege characteristics such as socioeconomic background and prior academic achievement.