Why You Don’t Want to Leave School During a Recession

Why You Don’t Want to Leave School During a Recession

Hannes SchwandtHannes Schwandt

The bad luck of leaving school during hard economic times can lead to higher rates of early death and permanent differences in life circumstances, Northwestern University’s Hannes Schwandt wrote in a policy brief. 

In particular, recession graduates have higher death rates in midlife, including a significantly greater risk of drug overdoses and other so-called “deaths of despair,” according to the research.

“High school graduates and dropouts suffered even stronger income losses than college graduates when entering the labor market during a recession,” said Schwandt, assistant professor of learning sciences who co-authored the study with Till von Wachter of the University of California Los Angeles.

Previous studies have focused mainly on college graduates entering the labor market and found that economic shocks can impact earnings up to 15 years after graduation.

But it’s less clear whether these effects linger beyond a decade, whether they matter for those with less education, and the impact of the fluctuations on health and longevity.

Schwandt and von Wachter used large population-wide data sets spanning over three decades to expand the analysis to those without college degrees and look at factors such as income, marriage, fertility, and mortality when recession graduates reach midlife.

In addition to the income losses, they found that negative impacts on social and economic factors persist in the long run. In midlife, recession graduates earned less, while working more. And they were less likely to be married and more likely to be childless.

They also found that recession graduates had higher death rates when they reached middle age. “These mortality increases stemmed mainly from diseases linked to unhealthy behaviors such as smoking, drinking, and eating poorly,” said Schwandt, currently a visiting professor at the Stanford Institute for Policy Research at Stanford University.

“Our results demonstrate that health, mortality, and economic and personal well-being in midlife can bear the lasting scars of disadvantages that come during young adulthood,” they wrote in the policy brief.

Schwandt and von Wachter suggest that public and private agencies may be able to mitigate these effects through interventions that consider the economic conditions people faced when they entered the labor force. 

Schwandt is a health economist and economic demographer who researches the relationship between economic factors and well-being, studying questions such as whether economic shocks or unemployment affect physical health, mortality, and fertility. He also researches the long-term human capital effects stemming from adverse health exposures during the prenatal period or early childhood. 


By Julie Deardorff
Last Modified: 5/5/19