  College students graduating in a recession have been shown to face large and
persistent negative effects on their earnings, health, and other outcomes. This
paper investigates whether students delay graduation to avoid these effects.
Using data on the universe of students in higher education in Brazil and
leveraging variation in labor market conditions across time, space, and chosen
majors, the paper finds that students in public institutions delay graduation
to avoid entering depressed labor markets. A typical recession causes the
on-time graduation rate to fall by 6.5% in public universities and there is no
effect on private institutions. The induced delaying increases average
graduation by 0.11 semesters, consistent with 1 out of 18 students delaying
graduation by one year in public universities. The delaying effect is larger
for students with higher scores, in higher-earnings majors, and from more
advantaged backgrounds. This has important implications for the distributional
impact of recessions.
