Question of the Day: Does a worker's level of education become MORE or LESS important during an economic slowdown (recession)?
This sharp and sudden economic downturn demonstrates how impacts on employment are felt differently based on the level of education.
Answer: More important
In just two months between February and April 2020, watch how unemployment rates varied dramatically based on level of education:
Unemployment analysis (source: FRED)
- What is the relationship between level of education and unemployment rates?
- Why do you think this relationship exists? Why does more education tend to lead to higher rates of employment?
- Which group saw the largest jump in unemployment rates between February and April? What jobs does someone without a high school degree have in our modern economy?
- Your friend says "education isn't worth it" and goes on to use the current situation as an example. "Everyone's getting laid off, so that degree really isn't worth it." Using the data above, agree or disagree with this statement.
Behind the numbers (Forbes):
Workers without college degrees were hit particularly hard. The unemployment rate for people with only a high school degree reached 17.3%, exceeding its peak during the Great Recession by 6 percentage points. People with at least a bachelor’s degree also saw heavy job losses, but their unemployment rate mercifully remained in single digits, at 8.4%.
This graph shows the historical relationship (from 1996-2019) between educational attainment and employment.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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