Education and Unemployment Levels Before and After the Great Recession

Abstract

This study analyzes the unemployment rates and the education levels before, during, and after the Great Recession in all fifty U.S. states, primarily focusing on the extent to which the amount of education affects the ability of the labor force to react to economic changes. Our hypothesis was that the greater a person’s educational attainment was, it was less likely that person was to become unemployed. We divided our data into three different time periods of 2006, 2009, and 2012, to illustrate the extent of the relationship between the percent of adults with a certain educational attainment level on unemployment rate, in addition to utilizing other explanatory variables such as the median age of adults, per capita GDP, and the percent of U.S. earnings from manufacturing. Our data shows that there is a significant negative correlation between adults with a high school diploma as well as with an Associate’s Degree or higher and the unemployment rate per state; however, there was no significance between adults with a Bachelor’s degree or higher and unemployment rate. Our observations indicate that having a high school diploma significantly decreased an individual’s unemployment rate. Having an Associate’s degree or higher is not as significant, but there is still a noticeable effect on unemployment rate in 2009 that implies the Recession did not impact adults with higher educational attainment levels.