In its recent update on Human Capital in the Time of COVID-19, World Bank projects that those who graduate from college in the time of pandemic are likely to suffer short to medium-term wage losses.
According to World Bank, graduating during a recession is linked to significant initial earning loss due to less desirable job placements.
However, those who are just about to go to college could pay less the cost of education.
„Pandemic-induced high unemployment rates are likely to reduce the opportunity cost of attending college. At the same time, the recession will affect many households economically, and funds for attending college may not be available. After the latest financial crisis, enrollment rates for tertiary education in the United States went up. However, because of a substantial decrease in family incomes, students shifted away from four-year private colleges toward two-year public institutions. Those who graduate from college now are also likely to suffer short to medium-term wage losses. Evidence from Canada suggests that graduating during a recession is linked to significant initial earning loss due to less desirable job placements, but that this penalty fades over some 8 to 10 years“, reports World Bank.
„Starting at a lower-paying job or at a less-desirable firm that does not make full use of an individual’s existing human capital may well lead to a lag in skill accumulation and result in a persistent disadvantage“, projects World Bank.