Health Effects of Graduating During a Bad Economy

May 30, 2014

According to a new study from David Cutler, Wei Huang and Adriana Lleras-Muney for the National Bureau of Economic Research, students graduating in bad economic times have lower wages and poorer health for many years after graduation compared to their counterparts who graduate during good times.

Analyzing data from European countries, the authors found correlations between employment, education and health:

  • Higher unemployment when graduating is associated with lower household income as well as poorer health and lower life satisfaction.
  • Moreover, those who graduate during times of high unemployment are more likely to be obese, smoke cigarettes and drink daily later in life.
  • However, these effects are less pronounced in individuals with more education.
  • Smoking and excessive alcohol uses actually drop during the short-term when unemployment rises, because individuals cut down on luxury expenses. However, the study found that such short-term deprivations actually lead to long-term increases in luxury goods consumption, such as smoking, alcohol and desserts.

The authors suggest that programs targeted at improving mental health and preventing the development of poor health habits could help uneducated youth during economic downturns.

Source: David Cutler, Wei Huang, and Adriana Lleras-Muney, "When Does Education Matter? The Protective Effect of Education for Cohorts Graduating in Bad Times," National Bureau of Economic Research, May 2014.

 

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