The effects of the Great Depression on educational attainment



This paper examines the relationship between the Great Depression and the educational attainment of young adults in the 1930s, taking advantage of the state-level variation in employment as individuals were turning a critical age. In general, there were negligible effects of the Great Depression's severity on average years of schooling beyond the cohort and state-specific effects. Regional differences in availability of appropriate schools seem to matter for the substitution effect to operate to increase the years of schooling during the recession. Furthermore, at the top end of educational attainment, the income effect seems to outweigh the substitution effect as the severity of the Great Depression is associated with a large drop in white male's college attendance. In sum, the Great Depression may have increased the average educational attainment, but the net effects seem small. More importantly, it appears to have compressed the distribution of educational attainment among white males.