Educational Attainment and the Cyclical Sensitivity of Employment

This article examines whether there are educational premiums on the quantity side of the labor market. We document four findings: (1) Trend employment patterns shifted for most educational levels post-1977; (2) the lower the level of educational attainment, the more volatile the employment ratio; (3) the volatility of employment for female high school dropouts increased over time even as the economy became less volatile; and (4) since 1984, the responses of skilled and unskilled employment to the business cycle have become more alike. This latter finding is consistent with a reduced degree of capital-skill complementarity during this period.