Public Finance: The Lost Generation? Scarring after the Great Recession
Jesse Rothstein, University of California, Berkeley
Abstract:
I investigate medium- and long-term impacts of the Great Recession on post-recession college graduates. Most “scarring” models emphasize effects of initial conditions that attenuate over the first decade of a worker’s career. But early career recessions may also have permanent effects. I decompose the recent cohorts’ experience into transitory time effects, medium-term scarring, and permanent cohort effects. Cohort effects are strongly cyclical. Medium-term scarring explains only half of this cyclicality. The long-run cumulative effect of the recession on graduates’ employment is more than twice as large as the immediate effect.
I investigate medium- and long-term impacts of the Great Recession on post-recession college graduates. Most “scarring” models emphasize effects of initial conditions that attenuate over the first decade of a worker’s career. But early career recessions may also have permanent effects. I decompose the recent cohorts’ experience into transitory time effects, medium-term scarring, and permanent cohort effects. Cohort effects are strongly cyclical. Medium-term scarring explains only half of this cyclicality. The long-run cumulative effect of the recession on graduates’ employment is more than twice as large as the immediate effect.
| Building: | Lorch Hall |
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| Website: | |
| Event Type: | Workshop / Seminar |
| Tags: | Economics, seminar |
| Source: | Happening @ Michigan from Department of Economics, Public Finance, Department of Economics Seminars |
