Major economic crises affect a country in myriad ways, often resulting in unemployment spikes, increased inequality between financial classes, housing instability, and much more. But how do they impact the educational landscape, particularly at the secondary school level? That's what Pawel Janas, an assistant professor of economics at Caltech, examined in a new study investigating American education rates during the Great Depression.
"I expected that if jobs disappeared, many young people would stay in school, as we already have extensive research showing this effect across many settings," Janas says. "But I was struck by how unequal that response was. When youth unemployment rose, boys from more affluent households were more likely to finish high school and even enter some post-secondary education, but the effects were much smaller, or basically absent, for girls and for children from poorer households."
Janas's findings are outlined in a recent paper in The Journal of Economic History.
To better understand how a major economic crisis changes young people's decisions about school, he chose to focus on the Great Depression (1929–1939), during which the US unemployment rate rose to roughly 25 percent. The crisis also happened right in the middle of a huge rise in US high school attendance—called the high school movement—that began in 1910 and was driven by the building of more schools and improved curriculum. Janas was curious about whether job loss pushed urban teenagers to stay in school longer. And if so, did that happen equally for everyone, or did the shift impact some groups more than others?
By merging multiple archival sources, Janas built a new dataset that linked 3.6 million young people across the 1920, 1930, and 1940 US censuses. This allowed him to gather information about where children grew up, what kind of households they came from, and how much education they eventually completed. He then combined that information with newly digitized local youth unemployment data from the Special Unemployment Census of 1931, which surveyed people in 18 cities across the US.
"The basic idea was to compare young people who were making schooling decisions during the Depression with slightly older people who had already passed that stage before the Depression hit," Janas explains. "I also compared siblings within the same household, which helps separate the effect of the local labor market from family background."
What he found was that the Depression did, in fact, increase schooling, and the change was not seen evenly across gender and financial differences. For the average young male making school-entry decisions during the Depression, the effect translated into about 0.07 additional years of schooling and a 1.3 percentage point increase in high school graduation rates. But the effects were negligible for female youth and for children from poorer households where the fathers' occupations put them in the bottom third for income estimates. While bad labor markets made school more attractive, Janas says only households with enough resources could really take advantage of the opportunity.
"This is an important point because it changes how we think about crises," says Janas, whose research is focused on how financial crises affect long-run US economic growth. "A crisis can open up an educational opportunity by making work less attractive, but if families are financially squeezed, that opportunity may be out of reach. In some cases, poorer households may still need children to work, help at home, or leave school earlier, even when jobs are scarce."
Unlike other studies that relied on broad state or national information, Janas says his new dataset creates a much more local measure of youth unemployment during the Depression, giving deeper insight into how young people's decisions were shaped by the jobs available in their own city. He says it also demonstrated that highlighting only the average effects of a given event can hide a lot.
"If we only look at the overall effect of the Depression on schooling, we miss the fact that boys and girls, and rich children and poor children, all responded very differently," Janas explains. "My paper connects the history of the high school movement to a broader point: Access to education depends not only on whether school is valuable but also on whether families can afford to keep children in school."
Next, Janas aims to understand the longer-term consequences of education during the Great Depression, such as whether the extra schooling some children received translated into better jobs, higher earnings, or greater mobility later in life.
"I would also like to better understand the mechanisms involved," Janas says. "Were families responding mostly because youth jobs disappeared, because school became relatively more attractive, or because certain school systems were better able to absorb students?"
In terms of assessing the current educational landscape in the context of an unsteady economy, Janas cautions about extrapolating from history. The 1930s were very different from today, he notes. For example, teenage labor was more common, compulsory schooling laws were different and varied state to state, and the social safety net was much smaller; federal unemployment benefits didn't start in the US until 1935. Because of these and many other factors, it is unlikely the same effects would happen now during an economic crisis.
However, Janas says, the broader lesson that labor market changes can influence choices about pursuing education is still relevant. But whether students can take advantage of those changes depends a lot on available resources.
"If policymakers want young people to stay in school during hard economic times, it is not enough for jobs to be scarce," Janas says. "Families may also need financial support, stable schools, and programs that reduce the cost of continuing education."
The paper in The Journal of Economic History is titled "Crises and Educational Attainment." Janas's research was supported by a Kellogg Dean's Office Research Grant, a Dissertation Fellowship from the Economic History Association, and the Center for Economic History at Northwestern University.
Pawel Janas
