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Are jobs in education still recession-proof? : Studying employment data in the education sector

Summary:
[embedded content] The U.S. economy is in recession, and the unemployment rate is above 10%. But the start of the school year is around the corner, and teachers are going back to work. Historically, student enrollment in colleges and universities increases during recessions,* but what do the data on educational employment show us? Here, we look at two graphs—one for New York City (the most populous U.S. city) and one for California (the most populous U.S. state)—to see if employment in the education sector really is recession-proof. [embedded content] Both FRED graphs above show there was no noticeable change in college, university, and professional school employment (the blue area) during the 1990-1991, 2001, and 2007-2009 recessions. The data, by the way, are seasonally adjusted to

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The U.S. economy is in recession, and the unemployment rate is above 10%. But the start of the school year is around the corner, and teachers are going back to work.

Historically, student enrollment in colleges and universities increases during recessions,* but what do the data on educational employment show us? Here, we look at two graphs—one for New York City (the most populous U.S. city) and one for California (the most populous U.S. state)—to see if employment in the education sector really is recession-proof.

Both FRED graphs above show there was no noticeable change in college, university, and professional school employment (the blue area) during the 1990-1991, 2001, and 2007-2009 recessions. The data, by the way, are seasonally adjusted to account for regular summer layoffs when schools are out. For reference, we also plot the employment in elementary and secondary schools (the green area). Student enrollment in those schools is mandatory, so one would expect a constant-size labor force, likely increasing due to population growth.

But before we call employment in the education sector “recession-proof,” we have to examine the latest data. In March and April, the mandated social distancing to combat the COVID-19 pandemic in the U.S. resulted in a decrease in employment in higher education both in New York City and California. By June, employment figures bounced back; but as the recession and pandemic continue, employment in the education sector may decrease again.

*For some summer reading, look at work from Harris Dellas and Plutarchos Sakellaris that shows college enrollment increases during recessions: When people are out of work, they choose to increase their education and accumulate “human capital.” (As economists would say, the opportunity cost of schooling decreases during recessions because there are fewer good alternatives.)

How these graphs were created: For both graphs: Search for a series in FRED, then click on “Edit Graph”; then open the “Add Line” tab and search for another series. Once done, open the “Format” tab and choose the graph type “Area” with stacking.

Suggested by Diego Mendez-Carbajo.

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FRED Blog
The Federal Reserve Bank of St. Louis is the center of the Eighth District of the Federal Reserve System. This District includes Arkansas, eastern Missouri, southern Illinois and Indiana, western Kentucky and Tennessee, and northern Mississippi.

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