When does education matter? The protective effect of education for cohorts graduating in bad times

Abstract

Using Eurobarometer data, we document large variation across European countries in education gradients in income, self-reported health, life satisfaction, obesity, smoking and drinking. While this variation has been documented previously, the reasons why the effect of education on income, health and health behaviors varies is not well understood. We build on previous literature documenting that cohorts graduating in bad times have lower wages and poorer health for many years after graduation, compared to those graduating in good times. We investigate whether more educated individuals suffer smaller income and health losses as a result of poor labor market conditions upon labor market entry. We confirm that a higher unemployment rate at graduation is associated with lower income, lower life satisfaction, greater obesity, more smoking and drinking later in life. Further, education plays a protective role for these outcomes, especially when unemployment rates are high: the losses associated with poor labor market outcomes are substantially lower for more educated individuals. Variation in unemployment rates upon graduation can potentially explain a large fraction of the variance in gradients across different countries.

Hardships of the Great Recession and health: Understanding varieties of vulnerability

“…In a review of prior recession findings (see Glonti et al, 2015), low educational attainment was more strongly associated with negative health outcomes during periods of economic downturns compared to before their onset. Additionally, Cutler et al, (2015) demonstrated that periods of high unemployment amplified the negative health consequences of low educational attainment. That is, educationally disadvantaged who entered the labor market during economic downturns were most likely to suffer poorer health.…”

“…Conversely, other findings indicate that the protective benefits of higher education are robust during economic downturns. A cross-national study of Europeans documented unemployment rates from 1948 to 2012 and found that higher education was especially health protective among cohorts entering the workforce during periods of high unemployment (Cutler et al, 2015). Despite selective evidence supporting subgroup differences in recession impact, a majority of studies on the health correlates of recession hardships have focused on broader population averages.…”

Education and alcohol use: A study of gene-environment interaction in young adulthood

“…The social causation model theorizes that education causally influences health. Mechanisms through which this occurs include better working conditions, greater sense of control, increased social capital, better labor market prospects, and improved health behaviors; such as diet, exercise, and not smoking (Cutler et al, 2015; Li & Powdthavee, 2015; Margolis, 2013; Ross & Wu, 1995; Song, 2011). Education becomes even more important across the life course, as the health consequences of educational disparities diverge across time (Cohen et al, 2013; Mirowsky & Ross, 2008).…”

Good Jobs and Recidivism

“…A great deal of empirical evidence supports basic theoretical predictions of a negative relationship between employment opportunities and criminal activity. 1 We may also expect local labour markets to influence released prisoners based on results from an emerging literature that documents long-term detrimental effects for high school or college graduates who enter more depressed local labour markets (Kahn, 2010;Oreopoulos et al, 2012;Maclean, 2013;Cutler et al, 2015). Recently, Bell et al (2014) estimated higher rates of lifetime crime and incarceration among those who leave high school during recessions in the US and the UK.…”