Even if their families avoid the direct harms, it’s likely young people in places hit by sudden industry closures or mass layoffs suffer more insidious forms of psychological damage that can hurt their academic performance and even knock them off the path to college, researchers from Duke University say.
Publishing Thursday in the journal Science, the professors from Duke’s Sanford School of Public Policy say the knock-on effects of a local industry’s failure are especially pronounced among blacks and among a region’s poorest families.
Large-scale job losses “are best conceptualized as community-level traumas that harm the mental health of both children and adults,” their paper said. “Such traumas inhibit learning and leave youth unable to optimally respond to increased economic incentives to invest in education.”
The team behind the study included Sanford School professors Elizabeth Ananat, Anna Gassman-Pines and Christina Gibson-Davis. Sanford School Ph.D. grad Dania Francis, now an economics professor at the University of Massachusetts’ Amherst campus, rounded out the group.
The women analyzed state-level data on job losses and unemployment, student performance, household income, adolescent mental health, college tuition and the use of need-based student aid. They also rolled into it the “educational mobility” data a team led by Stanford University economics professor Raj Chetty has compiled about the economic backgrounds of the college students born from 1984 to 1993.
Going in, they suspected, based on their findings from early studies, that large-scale job losses in a community can affect the choices teenagers make about whether or not to go to college.
“My sense is that most policymakers, when they think about job losses, still tend to think about the individual worker,” Gassman-Pines said. “Of course, those workers who lose jobs need assistance. But it’s also the case that being in a community where a lot of people are losing jobs, even if you continue to be employed or if you’re a student, that creates a sense of uncertainty and stress.”
And their statistical work ultimately seemed to bear that out, finding that an increase in state-level job losses correlates with a larger gap in the college-going rates of the rich and the poor. A 7 percent job loss — typical in states where the most-affected tenth of the adolescents lived — seemed tied to a “20 percent decline in the likelihood that the poorest youth attend college,” the Duke team said.
Moreover, that doesn’t look like the result of “standard economic explanations” like people moving out of economically depressed states or simply electing to forgo college because they don’t have the money.
Though median incomes dropped along with employment, the effects on income were “not large enough to fully account” for the findings, the professors said. Also, the observed effect “does not vary by state college tuition levels,” even after accounting for financial aid.
Overarching that, the “effect we find in states is much too large to be accounted for by isolated responses among the 1.5 percent of students with at least one parent affected by a[n aggregate] 1 percent job loss,” they said in the paper, arguing that at the levels they’re seeing in the data, “it necessarily reflects a macro-level effect that includes responses by the other 98.5 percent of children in the state.”
In an interview, Gassman-Pines said the team believes stress plays an important role and affects even those who aren’t caught in a mass layoff’s immediate fallout.
“Our thinking is a lot of it stems from the uncertainty generated by seeing these job losses in your community — youth and adults worrying, ‘Is this going to happen to our family, [and] if it did, how would we get by,’” she said. “It’s stressful to have that worry about what the future might hold, and it is, we believe, one of the key mechanisms.”
In their paper, the Duke team said other countries, Denmark most notably, try to smooth things out for displaced workers by sponsoring retraining programs that in the U.S. are usually reserved for people who can point to foreign trade as the reason for a plant or business closure.
That might help by “reducing the uncertainty about re-employment prospects,” they said, pointing out that their statistical analysis also indicates college-going rates do rise, if unevenly, following to job losses in states where “finding a new job is easier” because unemployment rates going in are low.
The Duke team’s work hints at an issue that’s troubled policymakers in the public UNC system, namely what Western Carolina University Chancellor David Belcher last year termed the “problem of aspirations” in rural parts of the North Carolina that have been in the economic doldrums for decades.
But Gassman-Pines said that’s a question that “we’re not really able to tackle” at the moment, at least not without data that track youth “in different areas over time, to really be able to tease apart whether this is just a short-term effect or something persistent over time.”