COVID-19 and the Socioeconomic Future of Youth

New data suggest a negative—but uneven—impact of the pandemic.

Posted Nov 12, 2020 | Reviewed by Matt Huston

The COVID-19 pandemic and the economic fallout have upended our lives, and new data suggest that there may be negative consequences for the educational and occupational trajectories of young adults. 

According to data released by the National Student Clearinghouse Research Center, the freshman enrollment rate in late October is down by 13%, with the largest decline observed in community colleges.1, 2 Many high school graduates may have postponed college enrollment to avoid taking classes online or living in dorms, or due to parents' temporary job loss.3 However, for some high school graduates, this may signal a premature end to their schooling. Some high school graduates may forego attending colleges altogether as their parents' joblessness becomes prolonged. Parents may be forced to use their educational savings to purchase necessities and stay financially afloat. New graduates may also have to work to contribute to their family income. They may have also experienced joblessness themselves that prevented them from amassing the funds necessary to partially fund their tuition and living expenses during the academic year.

Many young adults may have not been able to secure jobs after graduation or may have lost jobs as a result of the economic downturn. According to the Bureau of Labor Statistics, the unemployment rate for young adults ages 20-24 was 23.5% in April 2020.4 Since then, unemployment rates have fallen to 11.6% in October 2020. Even the fallen rate, however, is roughly 60% higher than the corresponding rate for pre-pandemic levels.4

Joblessness and job loss due to the economic fallout may have a lasting impact on the career trajectories of young adults. A large body of work in economics has shown that an economic downturn at the beginning of one's career may result in persistent wage losses.5,6 Economic shocks may create gaps in one's resume that could be a red flag for prospective employers. They may also diminish one's prospects for career mobility by forcing new graduates into occupations that are not a good fit with their educational credentials.7 The lifelong wages of some new graduates may be permanently depressed as a result of this mismatch. Other new graduates may be forced to switch careers after the pandemic, starting over with lower wages and a steeper learning curve.

The impact of COVID-19, however, is not even. Although college enrollment is down for all ethno-racial groups, the decline in enrollment is much larger for Black, Hispanic, and Native American youth than for Whites and Asian American youth.1 Similarly, college enrollment rates declined more in community colleges than in four-year colleges.2 Socioeconomically disadvantaged youth are more likely than their advantaged counterparts to enroll in community colleges. A sharper decline in community college enrollment rates means that high school graduates from disadvantaged backgrounds enrolled in postsecondary school at lower rates than their advantaged counterparts. Disparities in postsecondary schooling and college enrollment rates may increase due to the pandemic and resulting economic fallout.

There is also some indication that the impact of COVID-19 on the career trajectories of new graduates may differ by socioeconomic status. College graduates from more affluent families may be able to move back to their parents' home. They may delay graduation or transition into graduate school while the economic fallout of the pandemic subsides. In fact, graduate enrollment is up by 2.7% despite a drop in the number of international graduate students enrolling in U.S. schools.3,8

The 2020 and 2021 cohorts of high school and college graduates may be a group hit hard by the COVID-19 pandemic. Experiencing economic shocks as they take their first steps to adulthood may have adversely affected both their educational and occupational trajectories. The impact of COVID-19, however, appears to be uneven, with youths from disadvantaged backgrounds being disproportionately affected. Whether COVID-19 has a lasting and enduring impact on the educational attainment, occupational trajectories, and lifetime earnings of these individuals will largely depend on policies like generous financial aid and job training programs for new graduates. In the absence of such policies, COVID-19 may amplify the educational, occupational, and socioeconomic divides among new graduates.

References

1. St. Amour, M. (November 12, 2020). Enrollment Still DownInside Higher Education. 

2. https://nscresearchcenter.org/stay-informed/

3. Korn, M. (October 15, 2020). College Enrollment Slid This Fall, With First-Year Populations Down 16%Washington Post

5. Kahn, L. B. 2010. “The long-term labor market consequences of graduating from college in a bad economy.” Labor Economics, 17 (2), 303–316.

6. Oreopoulos, P., T. von Wachter, and A. Heisz. (2012). “The Short- and Long-Term Career Effects of Graduating in a Recession.” American Economic Journal: Applied Economics 4 (1): 1–29.

7. Wee, S.L. (2013). Born Under a Bad Sign: The Cost of Entering the Job Market During a Recession. Unpublished Manuscript. 

8. Reardon, S. (November 9, 2020). More international students were coming to US universities — then COVID hit. Nature Career News.