Graduating into a recession stunts the careers of the young men and women entering the labor market. But it turns out a lot of students don’t sit back and passively accept this outcome: Many students who see a recession during their early college years switch to majors with better job prospects.
According to new research from Benjamin Keys at the University of Chicago, Brian Cadena at the University of Colorado Boulder and Erica Blom at Edgeworth Economics, the shifts can be dramatic.
When the national unemployment rate rises by 1 percentage point, the share of women studying business rises by nearly two-thirds of a percentage point. The share of women studying nursing climbs by nearly a third of a percentage point. An additional quarter percentage point switch into accounting. Meanwhile, enrollment in education, literature and languages, sociology and psychology drops.
All told, a rise of just 1 percentage point in the national unemployment rate leads at least 2% of women to switch majors. That means a year with a moderate rise in the unemployment rate induces tens of thousands of people to switch fields. (The paper homes in on the economy when students are age 20, and the major that they subsequently graduate with.)
Men switch, too, but into a somewhat different set of majors. Men become much more likely to study engineering and somewhat more likely to study accounting, science and economics. They shift away from education, liberal arts and literature and languages.
Chosen excerpts by Job Market Monitor. Read the whole story at The Fields That Students Flock to During Recessions – Real Time Economics – WSJ.