Ripple Effect of Today’s Large-Scale Job Losses Affects Future Generations

Senior businessman rubbing his tired eyes

The ripple effect of large-scale layoffs can linger for years and keep the next generation from going to college. In fact, children who see widespread layoffs as they grow are less likely to enrol in higher education, even if no one in their family loses a job.

According to a recent research study published in the June 16 issue of the journal Science, students who come from poor middle schools and high schools who witness major job losses in their region are less likely to go to college when they turn 19. A seven-percent state job loss when a student is a teen is correlated with a 20% decline in the likelihood that the poorest youths will go to college.

A large-scale loss of local jobs doesn’t just hurt an adolescent’s mental health; it also hinders academic performance. Job losses are not limited to children who come from families where a parent has lost a job, also extending to those who see their friends, neighbors, and others in the community do so.

The fact is that large-scale job losses are not economic goings-on that only impact the affected families. Rather, wide-scale job losses can affect an entire community.


Elizabeth O. Ananat, an associate professor of public policy studies and economics at Duke University and a lead author of the paper, said that, “Worse mental health and worse test scores, they are all going to be blows to you that knock you off the path. That was a difficult path to begin with.”

The study sheds light on the long-term fate of communities and young students who are affected by new technology and economic upheaval that come from the thousands of blue-collar jobs that have been lost over the last couple decades.

This doesn’t even factor in the hundreds of thousands of retail jobs that have been lost over the last number of years. Department stores like J.C. Penney Company Inc (NYSE:JCP), Macy’s Inc (NYSE:M), and Sears Holding Corporation (NASDAQ:SHLD) have jettisoned more than 100,000 jobs since October 2016 alone. That’s more than the number of steel workers or coal miners currently employed in the U.S.

High-income kids are largely going to go to college regardless,” said Anna Gassman-Pines, an associate professor of public policy, psychology and neuroscience at Duke and co-author of the study. “Where we’re really seeing this decrease is concentrated among the lowest-income kids. That’s increasing inequality.”

The study suggests that economic theory has focused on the idea that a smaller number of blue-collar jobs increases the relative return on investment of a post-secondary degree. However, it’s not working out that way.

Economists tend to think about it as a change in relative prices — the return changes. They miss the fact that it’s an emotional blow, like another kind of community trauma would be,” Ananat adds.

Regardless of who anyone voted for in the last U.S. election, the current flood of job losses, store closures, factory closings, government cutbacks, pension cuts, bankruptcies, and outsourcing of American jobs will reverberate for years and years. And they will continue to have a detrimental effect on the U.S. economy.


Linking job loss, inequality, mental health, and education,” Science, June 16, 2017.

The Silent Crisis of Retail Employment,” The Atlantic, June 18, 2017.

Job Losses Linger,” Inside Higher Ed, June 16, 2017.


Categories: Job Cuts, News