The Great Recession and Causal Effects of College for Young Workers

Matthew K. Curry, University of California, Los Angeles

During the aftermath of the Great Recession, many press accounts focused on the difficulties facing recent college graduates, concerned that worsening economic conditions had rendered 4-year college degrees significantly less valuable. However, data collected by sociologists and economists suggests a different picture, as they note that college graduates did well during the recession and recovery compared to those with less education. Still, it remains unclear whether college acted as a protective factor during the economic downturn or if the positive effect of higher education was merely a product of differential selection into college. Using panel data from the NLSY-97 and propensity score matching to control for selection bias, I test whether the causal effects of college on socioeconomic outcomes for young adults changed during the Great Recession, and whether any changes in these effects have been homogenous across the population.