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DTSTART:20070311T020000
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DTSTAMP:20230911T115628
DTSTART;TZID=America/Detroit:20230913T160000
DTEND;TZID=America/Detroit:20230913T172000
SUMMARY:Workshop / Seminar:Educational choices and lifetime hysteresis: Disparities in college enrollment and dropout behavior.
DESCRIPTION:Every young individual faces a pivotal decision upon graduating from high school: whether to enroll in college or enter the labor market. High unemployment rates during this sensitive period have opposing effects on this decision. On one hand\, it imposes financial constraints\, hindering individuals' ability to afford tuition costs\, and on the other\, it lowers the opportunity cost of college stemming from lower foregone wages. The relative importance of each of these mechanisms is contingent upon income levels. Specifically\, periods marked by high unemployment rates elevate the likelihood of college dropouts among low-income individuals\, while simultaneously suffering hysteresis effects of entering and staying in the labor force during wage stagnation. Conversely\, high-income individuals are more likely to avoid these hysteresis effects by using college enrollment as a tool to strategically choose better labor market entry conditions. I built a dynamic model to quantify the lifetime effects of experiencing an economic recession during sensitive times such as high school graduation and while being enrolled in college. High-income individuals exhibit remarkable resilience to the influence of economic downturns\, using college enrollment to mitigate the disruptive effects of business cycles. Conversely\, low-income individuals\, who would typically abstain from college enrollment\, do experience some repercussions during recessions due to adverse conditions prevailing in the labor market. However\, it is the cohort of middle-low income individuals that emerges as the most vulnerable to the sway of economic fluctuations. The state of the economy during these sensitive periods significantly shapes their lifetime trajectories\, profoundly impacting their choices regarding college enrollment and the decision to persist or withdraw from educational pursuits\, thus cementing the enduring hysteresis effects generated by recessions.
UID:112009-21828324@events.umich.edu
URL:https://events.umich.edu/event/112009
CLASS:PUBLIC
STATUS:CONFIRMED
CATEGORIES:Economics,Macroeconomics,seminar
LOCATION:Lorch Hall
CONTACT:
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