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Citation Information

Type Report
Title The effects of the Great Depression on educational attainment
Author(s)
Publication (Day/Month/Year) 2008
URL http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.187.3666&rep=rep1&type=pdf
Abstract
This paper examines the relationship between the Great Depression and the educational
attainment of young adults who were growing up during the 1930s, taking advantage of the statelevel
variation in employment as individuals were turning a critical age. I find that there was
negligible association between the Great Depression’s severity and the average years of
education. Statistically significant difference is found only for white females who could expect a
larger premium on schooling during the 1930s. Regional differences in availability of
appropriate schools, however, may mask the varying effects in different regions. Splitting the
sample into different regions, I find numerically larger and statistically significant results in more
populous regions and states in which there were more public junior colleges. A small
substitution effect found at the mean does not necessarily indicate that the impact of the Great
Depression was uniform across the distribution of educational attainment. At the top end of
educational attainment, the income effect seems to outweigh the substitution effect. The results
of quantile regressions suggest that a ten-point decrease in the employment index is related to 27
percent of a year longer schooling of white males at the 90-percentile of the distribution. 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. My results also suggest that for the substitution effect to work,
supply factors such as availability of appropriate institutions may be important.

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