Assessing the Impact of the Great Recession on the Transition to Adulthood

Abstract

The impact of a major historical event on child and youth development has been of great interest in the study of the life course. This study is focused on assessing the causal effect of the Great Recession on youth disconnection from school and work. Building on the insights offered by the age-period-cohort research, econometric methods, and developmental psychology, we innovatively develop a causal inference strategy that takes advantage of the multiple successive birth cohorts in the National Longitudinal Study of Youth 1997. The causal effect of the Great Recession is defined in terms of counterfactual developmental trajectories and can be identified under the assumption of short-term stable differences between the birth cohorts in the absence of the Great Recession. A meta-analysis aggregates the estimated effects over six between-cohort comparisons. Furthermore, we conduct a sensitivity analysis to assess the potential consequences if the identification assumption is violated. The findings contribute new evidence on how precipitous and pervasive economic hardship may disrupt youth development by gender and class of origin.