The young women who entered the job market during a recession are doubly disadvantaged.
Hard Times Are Harder for Women
Joshua Gans is a professor of strategic management at the Rotman School of Management, University of Toronto, and the author of "Parentonomics: An Economist Dad Looks at Parenting."
January 11, 2012
Recessions are bad. If you start out at a disadvantage, they’re even worse.
That was the conclusion of a study by Philip Oreopoulos, Till von Wachter and Andrew Heisz who examined the impact of recessions on the careers of college graduates in my home country of Canada. If the labor market worked well and if recessions were just blips, then their stamp would disappear as the economy grew again. Sadly, what the researchers found was that while the aggregate indicators like unemployment rates recovered enough for politicians to claim victory, for those unlucky enough to have graduated in a recession, the disadvantage sticks with them.
How bad is it? Well, for the average graduate it’s not fun, but it’s recoverable. You lose 9 percent of earnings in the first five years out, and it is not until 10 years later that things even out again. But that is for the average. If you are just starting out and don’t have much work experience, it’s worse. Even at 10 years out (when the study ended), such graduates were still behind. And it isn’t just earnings. Graduates end up in worse jobs, in smaller companies and with reduced opportunities.
But I left out one thing: the study focused only on men. However, the study suggests that people with a labor market disadvantage fair worse in recovering from a recession, and this would likely include women. The young women who entered the job market during a recession are doubly disadvantaged, so it is no wonder that they had trouble finding “good” jobs and that many are pursuing higher education.
To be sure, pursuing graduate education is one way of making an earnings difference: the more education you receive, on average, the better your career prospects. However, because it is a forced choice for many of these young women, it would be surprising if it lead to future labor market advantages over those workers who instead gained relevant experience. Some may end up breaking glass ceilings as a result of this, but it is hard to expect great positive social change during hard times.