The Effects of Local Job Destruction on Youth Mobility

We combined the quasi-experimental data we have constructed on mass job losses by month in every county in North Carolina and by quarter in every state in the US (Ananat, Gassman-Pines, and Gibson-Davis 2013) with local area statistics on mobility by cohort (Chetty, Hendren, Kline, Saez, and Turner 2014) to identify how changing local job opportunities have affected the relationship between family income and college attendance and between family income and own income at age 26 over the past 20 years. Recent work has shown that parental job loss the year a child is 17 significantly decreases the probability that the child attends college (Coelli 2009; Oreopoulos, Page, and Stevens 2008), but it is unclear whether these effects are large enough to significantly affect aggregate mobility. We measured the effect of area job losses when a cohort is 17 on college-going at the population rather than individual level, and, further, explore the consequences of downturns for later earnings inequality. In addition, we examined how state-level policies around unemployment insurance, K-12 school funding, and college tuition affect the relationship between job destruction and the income-college gradient.