Saturday, February 13, 2010

The Effects of Graduating During a Recession

The Columbia Economics website has an interesting research section on Employment, Health, Education and Welfare: "Columbia's applied microeconomists study within a variety of subfields, including labor economics, health economics, and the economics of education." There is a particular section devoted to Market Shocks and Their Short and Long-Term Effects on Career Profiles. Here's an excerpt about research conducted by Professor Till von Watcher; it will make interesting reading for current graduates. The message seems to be: get a job sooner rather than later; even if that means emigrating or working in a low-paid internship. Even then, there will still be a career disadvantage in many cases.
Using a comparative approach between the labor markets of the U.S. and Europe, Till von Wachter studies the short and long-term effects of market shocks on workers' careers. In his paper, "The Short and Long-Term Effects of Graduating in a Recession (with Philip Oreopoulos and Andrew Heisz)," he uses the example of Canadian students graduating during a recession to show how the setbacks experienced by students entering into a temporarily inhospitable job market can have relatively permanent consequences which slowly fade only after about eight to ten years. Students graduating in a healthy market can maintain a significant advantage over the ones initially affected by the recession.

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