© 2024 Boise State Public Radio
NPR in Idaho
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations
Click here for information on transmitter status in the Treasure and Magic Valleys

Graduating High School During A Recession Could Be A Good Thing, Study Finds

NOEL KING, HOST:

This month, thousands of young people are graduating from high schools and colleges right into a recession. That is bad news. But it isn't all bad news. New social science research suggests there are some upsides to graduating during a recession, at least for some students. To explain, we're joined by Shankar Vedantam, host of NPR's Hidden Brain podcast. Hey, Shankar.

SHANKAR VEDANTAM, BYLINE: Hey, Noel.

KING: So what's the upside?

VEDANTAM: Well, the upside is what happens once you graduate. We've known for a long time, Noel, that graduating college in the midst of a recession is not just tough. It has long-term negative consequences. Your lifetime earnings can be affected because if you have to take a lower paying first job because there's so little work that's available, that can have a ripple effect on your next job and so on. In an analysis of nearly 30 countries, including the United States, the economists Marc Piopiunik at the University of Munich and his co-authors, Franziska Hampf and Simon Wiederhold, find this is not true for high school graduates.

MARC PIOPIUNIK: We found that graduating from high school during a recession leads to higher wages later on the labor market. We also find, in line with these findings, that people also have higher literacy and numeracy skills later on.

KING: That sounds completely counterintuitive. Why would they have higher wages and better skills later on?

VEDANTAM: It does sound counterintuitive. But in some ways, actually, there's a simple explanation, Noel. If you're graduating high school in good economic times, you might think of forgoing college and just joining the workforce. During bad economic times, you're much more likely to plumb for college. And going to college, it turns out, significantly improves your lifetime earnings.

Piopiunik and his colleagues analyzed the effects of graduating in a recession by measuring the unemployment rate when people are graduating. And they find the higher the unemployment rate, the more likely people are who are graduating high school to enroll in college.

PIOPIUNIK: An increase in the unemployment, in the national unemployment rate, by 5 percentage points increases college enrollment by about 4 percentage points. And it increases wages by about 5%.

KING: More young people going to college is a good thing. But is the effect limited to students who have the money to go to college?

VEDANTAM: That's exactly right, Noel. But remember, this was an international study. In many countries of the world, going to college is not that expensive. In fact, in many countries, it's actually free. That's not the case in the United States, which is why in this country, the silver lining is largely enjoyed by kids who come from well-off families.

Now, what this means, of course, is that if those are the kids who are more likely now to go to college and then have higher lifetime earnings, what this might do is potentially widen the income inequality gap. Here's Piopiunik again.

PIOPIUNIK: The positive effects of recessions and high school graduation on college investments or college attendance and also college completion are greater for individuals with higher socioeconomic background.

VEDANTAM: One of the other interesting things is that women who graduate from high school in the midst of a recession seem to be doing especially better than women who don't graduate in the midst of a recession. And the reason for that is that both men and women are likely to enroll in college when they graduate in the middle of a recession. And women who go to college are much more likely to work full-time. And working full-time, of course, greatly increases your lifetime earnings.

KING: Interesting stuff. Shankar Vedantam, host of NPR's podcast Hidden Brain. Shankar, thanks so much for joining us.

VEDANTAM: Thank you so much, Noel. Transcript provided by NPR, Copyright NPR.

Shankar Vedantam is the host and creator of Hidden Brain. The Hidden Brain podcast receives more than three million downloads per week. The Hidden Brain radio show is distributed by NPR and featured on nearly 400 public radio stations around the United States.

You make stories like this possible.

The biggest portion of Boise State Public Radio's funding comes from readers like you who value fact-based journalism and trustworthy information.

Your donation today helps make our local reporting free for our entire community.