Caught in the Cycle: Economic Conditions at Enrollment and Labor Market Outcomes of College Graduates

65 Pages Posted: 10 Aug 2020

See all articles by Alena Bicakova

Alena Bicakova

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Guido Matias Cortes

York University

Jacopo Mazza

University of Amsterdam

Abstract

We find robust evidence that cohorts of male graduates who start college during worse economic times earn higher average wages than those who start during better times. This gap is not explained by differences in selection into employment, in economic conditions at the time of college graduation, or in field of study choices. Graduates who enroll in bad times are not more positively selected based on their high-school outcomes, but they achieve higher college grades, sort into higher-paying occupations, and earn higher wages conditional on their grades. We find similar but less robust patterns for female graduates. Our results suggest that individuals who enroll during economic downturns exert more effort during their studies.

Keywords: business cycle, higher education, cohort effects

JEL Classification: I23, J24, J31, E32

Suggested Citation

Bicakova, Alena and Cortes, Guido Matias and Mazza, Jacopo, Caught in the Cycle: Economic Conditions at Enrollment and Labor Market Outcomes of College Graduates. Available at SSRN: https://ssrn.com/abstract=3669490 or http://dx.doi.org/10.2139/ssrn.3669490

Alena Bicakova (Contact Author)

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

Guido Matias Cortes

York University ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Jacopo Mazza

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

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