Recovering from a Downturn
The Pew Economic Mobility project has an interesting report out on how people recover from adverse income shocks. The report itself has a somewhat weirdly positive spin on their own data, focusing on the fact that recovery rates haven’t gotten worse over time. I think the basic facts, though, are pretty sobering—it takes many people a long time to recovery from adverse shocks. There’s also considerable inequality-reenforcing demographic variance around educational achievement. Just consider this in the recent period:
One more reason that it’s important to raise college graduation rates. It also helps to find someone to cohabit with:
Interestingly, while this information doesn’t quite support the view that a recession-stricken woman needs a man like a fish needs a bicycle, it does suggest that a recession-stricken man needs a woman more.
But of course this is data from 1995-2004 a period during which labor market conditions were good on average. Right now, we’re entering a period during which labor market conditions will be the worst they’ve been since the start of World War II and will likely stay that way for a good long time. Presumably, that will make it harder to recover from this kind of thing.
8 Responses to “Recovering from a Downturn”
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June 18th, 2009 at 3:21 pm
“One more reason that it’s important to raise college graduation rates.”
Wouldn’t it be easier to just hand out free government sanctioned college diplomas to everyone?
June 18th, 2009 at 3:29 pm
If only we could pay higher taxes, then all these problems would disappear.
June 18th, 2009 at 3:31 pm
Jim, I know you’re kidding, but it reminds me of what an independent California Republic did in a Heinlein novel: settled the educational inequality by giving everyone a BA.
Regarding the graphs, if a bar totals up to less than 100%, does that mean the remaining white space covers those who take more than 10 years to recover from an income loss of 5% or more, those that never suffered an income loss, or that the graph is fscked up?
June 18th, 2009 at 3:34 pm
Isn’t this just obviously reverse causation? A guy who has just suffered an income shock of 5%-100% is going to have more trouble staying in his current relationship, or finding a new one, than one who hasn’t; amongst those who have suffered income shocks, the men who have reason to be confident that the shock will be reversed quickly will resemble those who suffered no income shock most closely.
June 18th, 2009 at 3:39 pm
Ok, after RTFA, I see that the fine print would have explained that the white space covers those outside a 10 year loss/recovery window. Bummer that it was chopped before posting to the blog.
June 18th, 2009 at 3:55 pm
Interestingly, while this information doesn’t quite support the view that a recession-stricken woman needs a man like a fish needs a bicycle, it does suggest that a recession-stricken man needs a woman more.
Given Matt Y.’s support of equal rights for non-straights, I figure it’s fair to attribute his erasure of BLGT persons to thoughtlessness, even if the language in the figure itself is inclusive.
June 18th, 2009 at 3:56 pm
crap, forgot to close the italics tag.
June 18th, 2009 at 6:01 pm
How are they reckoning this? From the day you get laid off (assuming job loss is the income shock)? Or from the day you get hired for a new job? And what constitutes recovery? Getting back to your pre-layoff income? Or that plus retiring any debts you ran up while unemployed?