TY - JOUR AU - Altonji, Joseph G AU - Kahn, Lisa B AU - Speer, Jamin D TI - Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success JF - National Bureau of Economic Research Working Paper Series VL - No. 20531 PY - 2014 Y2 - September 2014 DO - 10.3386/w20531 UR - http://www.nber.org/papers/w20531 L1 - http://www.nber.org/papers/w20531.pdf N1 - Author contact info: Joseph G. Altonji Department of Economics Yale University Box 208264 New Haven, CT 06520-8264 Tel: 203/432-6285 Fax: 203/432-5591 E-Mail: joseph.altonji@yale.edu Lisa B. Kahn Department of Economics University of Rochester 280 Hutchison Rd P.O. Box 270156 Rochester, NY 14627 E-Mail: lisa.kahn@rochester.edu Jamin Speer University of Memphis E-Mail: jspeer@memphis.edu M1 - published as Joseph G. Altonji, Lisa B. Kahn, Jamin D. Speer. "Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success," in David Card and Alexandre Mas, organizers, "Labor Markets in the Aftermath of the Great Recession" Journal of Labor Economics, Volume 34, Number S1, part 2 (2016) AB - We analyze the early labor market outcomes of U.S. college graduates from the classes of 1974 to 2011, as a function of the economic conditions into which they graduated. We have three main findings. First, poor labor market conditions substantially disrupt early careers. A large recession at time of graduation reduces earnings by roughly 10% in the first year, for the average graduate. The losses are driven partially by a reduced ability to find employment and full-time work and partially by a roughly 4% reduction in hourly wage rates. Second, these effects differ by field of study. Those in majors with typically higher earnings experience significantly smaller declines in most labor market outcomes measured. As a result, the initial earnings and wage gaps across college majors widen by almost a third and a sixth, respectively, for those graduating into a large recession. Most of these effects fade out over the first 7 years. Those in higher paying majors are also slightly less likely to obtain an advanced degree when graduating into a recession, consistent with their relative increase in opportunity cost. Our third set of results focuses on a recent period that includes the Great Recession. Early impacts on earnings are much larger than what we would have expected given past patterns and the size of the recession, in part because of a large increase in the cyclical sensitivity of demand for college graduates. The effects also differ much less by field of study than those of prior recessions. ER -