Birth date, business cycles, and lifetime income

I was reading Paul Krugman's editorial and followed a link to the OMB blog. There, I found a sad gem written  by Peter R. Orszag, Director of the OMB.
 My daughter graduates college next year, so this hits very close to home.

I recently read a paper that suggests that, for this cohort, the wage effect of graduating during a period of high unemployment will continue well beyond the end of the recession and even the labor market rebound. In examining the cohorts of college graduates that entered the labor market before, during, and after the recession of the early 1980s, Lisa Kahn of the Yale School of Management found that an increase in unemployment produces a significant and enduring negative wage effect.

http://www.whitehouse.gov/omb/blog/09/10 22/Birth-date-business-cycles-and-lifet ime-income

A parent wants their kid to succeed and to have the best environment to flourish. It's a little heartbreaking to send a kid out into an inhospitable world, after all the hard work the kid has done to prepare. Life is unfair.

But when I think of the American families who have it much worse than we do, I can't wallow in self-pity. Then I think of the kids in Palestine (thanks to Mainstreet) who have grown up in a Universe where the element 'Opportunity' doesn't even appear on the periodic table.

This is why I don't own a pistol. I'd surely end up eating it.

link to krugman: http://www.nytimes.com/2009/10/30/opinio n/30krugman.html?_r=1&hp

Tags: Class of 2009, Income, Recession (all tags)

Comments

1 Comment

There's a silver lining

Orzag concludes:

The evidence thus suggests that a recession hits young people particularly hard, knocking them off course with effects that last for years to come. As we rebuild a new foundation for economic growth, it's critical that we keep this in mind.

We have good Democrats in the White House.

by QTG 2009-10-30 07:12AM | 0 recs

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