[Type here] THE ECONOMIC SECURITY OF 

AMERICAN HOUSEHOLDS

Issue Brief Two: 

Labor Market Transitions of Young Adults

U.S. Treasury Department

Office of Economic Policy

October 2016

Tiffany Chou was the principal drafter of this report. Inquiries should be directed to the Office 

of Economic Policy at (202) 622-2200
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Issue Brief Two

This report is the second in a series examining the current economic situation of Americans in 

the wake of the Great Recession. This economic security brief looks at changes in how young 

adults are transitioning into the labor market. What happens to them once they leave school? 

How much do they earn? How long are they unemployed or entirely out of the labor force? 

Have those trends changed over time? 

The cohort of Americans who came of age in the late 1990s had early labor 

market experiences influenced by the Great Recession. As with every generation, 

education and early work experience are important determinants of income 

growth and retirement security. Understanding the current economic security of 

this generation, and comparing it to a past generation, will help us better 

understand the current economy and anticipate this generation’s overall 

economic security moving forward.

In this brief, we look at two cohorts from the National Longitudinal Survey of Youth (NLSY) –

those coming of age in the late 1970s and those coming of age in the late 1990s. These surveys 

follow individuals over the early parts of their careers and therefore allow us to better 

understand how educational decisions and the transition to the labor market are evolving 

across generations, including changes in earnings, homeownership and partnership. Our 

analysis includes an examination of non-traditional college students — those who attend 

college but not immediately after high school - which is an increasingly important group that is 

often overlooked in studies of the transition to the labor market.

First, we examine how income trajectories evolve over time for young people. Second, we 

investigate how individuals spend their time in the early years after leaving school – whether 

they are employed, looking for work, or not in the labor force at all. We also look at the degree 

to which salaries change from one year to the next and how this earnings volatility differs by 

education. Finally, we look at homeownership and marriage, two other measures of the 

transition to adulthood. 

Key Findings

 Young adults in the 2000s who were working full-time at age 20 earned less than 20-

year-olds in the 1980s, but this gap reverses by age 30. In other words, 30-year-olds in 

the most recent decade have slightly higher earnings than 30-year-olds of a generation 

ago.

 This trend in early adulthood earnings is primarily driven by the fact that young adults in 

the 2000s are more likely to have attended college, which means fewer of them work at 
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age 20. College-goers have strong earnings potential when they eventually begin 

working.

 Real earnings among those with the same level of education have not changed much 

between the two cohorts. Ten years after leaving school, men who completed college 

immediately after high school and worked full-time earned about $80,000 per year

while those who finished high school and never attended college earned about $40,000, 

and this earnings gap is relatively similar between the 1979 and 1997 cohorts.

 Individual earnings sometimes fluctuate dramatically from one year to the next, but 

those who began working in the 2000s experienced fewer large declines within the first 

six years of working compared with those who started working in the 1980s.

 The likelihood of being in the labor force for young men and women is trending in 

opposite directions as young women in the 2000s have been spending more time in the 

labor force relative to those in the 1980s. The opposite pattern is true for men.

 Early labor market outcomes for students who work before earning an AA or BA (a 

group we will call Non-traditional Completers) used to be similar to those who started 

but did not complete college (a group we will call Non-completers). But the outcomes 

of these two groups have diverged in the more recent cohort, with Non-traditional 

Completers looking more like those who finished college immediately after high school 

and Non-completers looking more like those who never attended college.

 Although the labor market outcomes are converging between Non-completers and 

those who never went to college, 39 percent of Non-completers borrowed to attend 

college. 

 Homeownership and living with a spouse are much less common among young people 

than in the past.

Data: National Longitudinal Surveys of Youth

This brief uses data from the 1979 and 1997 cohorts of the NLSY. For each cohort, individuals 

are selected for the sample if they were teenagers or in their early 20s in the baseline survey 

year.1 For the 1979 NLSY, this corresponds to people born in 1957-64 while individuals in the 

1997 NLSY were born in 1980-84.2 In other words, the 1979 NLSY cohort was finishing school 

and starting work in the early 1980s while the 1997 NLSY cohort did so in the early 2000s. The 

 

1

For the 1979 wave, respondents had to be 14-22 when first surveyed. For the 1997 wave, respondents were 12-

16 by the end of 1996.

2 The NLSY oversamples particular subpopulations, so our results are all weighted to account for the sampling 

design. The 1979 cohort also includes a military oversample, which we exclude from this analysis.
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latest available data are in 2012 for the 1979 cohort and 2013 for the 1997 cohort.3 Price levels 

were different during the 1980s and 2000s, so all dollar values in this brief are converted to 

2013 dollars.4 

Most importantly for our purposes, each of the NLSY panels follows the same individuals over 

time, meaning we observe how both education and income change over time for the same 

person. This differentiates the NLSYs from many other household surveys, which include 

information on education only at a particular point in time and do not follow the same person 

from year to year. Because we have individual educational histories rather than just education 

at a particular point in time, we can classify people based on not just their current education, 

but also on their ultimate educational attainment. Since the last wave of the 1997 NLSY was in 

2013, we can only observe education through about age 30, though most people have 

completed their education by this point.5 

College Attendance Overall

Young adults today are much more likely to have attended some college compared to the 

previous generation. Figure 1 shows how college attendance and completion have changed 

between the two NLSY cohorts. The total height of each bar is the share of high school 

completers who attend some college. In the 1979 cohort, 60 percent of high school graduates 

attended at least some college, and this increased to 76 percent in the 1997 cohort. However, 

college completion, denoted by the orange segments, did not change much – approximately 40 

percent of high school graduates in both cohorts had completed some kind of college degree. 

The lack of change in overall college completion obscures different trends between men and 

women. The share of women who complete an Associate’s or Bachelor’s degree increased from 

43 percent to 46 percent between the two cohorts. For men, however, the share of completers 

fell from 38 percent to 34 percent.

For both genders, the gray segments, denoting the share who attended but never completed a 

degree, make up most of the increase in attendance between the 1979 and 1997 cohorts. Noncompleters were 22 percent of the 1979 subsample but 36 percent of the 1997 one, and the 

magnitude of this change is similar between men and women.

 

3

Individuals in the NLSY are usually surveyed each year, but the 1979 NLSY switched to biennial waves starting in 

1994. The most recent available wave for this cohort is 2012. The 1997 NLSY surveys are still conducted annually, 

although there was no survey in 2012, and the most recent wave is 2013.

4 2013 dollar conversion is done by using the CPI-U-RS. See http://www.bls.gov/cpi/cpiurs.htm. 

5

In the 1979 cohort, 83 percent of the sample had reached their final educational attainment by age 30. While 

individuals in the 1997 cohort may be more be more likely to remain in school through their 30s, this is probably 

limited to people obtaining graduate degrees, who we omit from the analysis.
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Classifying Individuals Who Go Back to College

We consider the first time an individual stops enrollment after receiving a high school diploma 

to be the year they first potentially enter the workforce (denoted T=0) and categorize 

individuals based on their eventual educational attainment. These categories are static, so 

individuals do not move around over time. The four mutually exclusive categories are:

 Traditional BA: those who completed a four-year degree immediately after high school 

and thus “enter” the work force with a Bachelor’s degree;

 Non-traditional Completers: individuals who entered the work force with a high school 

diploma but eventually returned to college and completed either an Associate’s or 

Bachelor’s degree;

 Non-completers: individuals who attended some college (either right after high school 

or later) but did not receive a college degree of any kind; and

 HS only: individuals who completed high school and never enrolled in college.

We think of “Traditional BAs” as what many perceive to be the “typical” college student –

someone in their late teens and early 20s who enrolls in college immediately after high school, 

attends college continuously, and then enters the labor force with a Bachelor’s degree after 

0%

25%

50%

75%

1980s 2000s 0 1980s 2000s 0 1980s 2000s

Figure 1: College Attendance and Completion among Those Who 

Finished High School

Share of young adults who attended college

Overall

Completed

a degree

Did not 

complete

Men Women

Notes: Based on the 1979 and 1997 National Longitudinal Surveys of Youth. Survey respondents in the 1979 cohort were 

finishing high school and starting work in the early 1980s; those in the 1997 cohort were completing high school and starting

work in the early 2000s. Includes all individuals with at least a high school diploma, including graduate degree holders and those 

with terminal Associate’s degrees. Completion status determined by last observed highest educational attainment, typically ages

19 to 25 in both cohorts. “Completed a degree” includes those who completed either an Associate’s or Bachelor’s degree, 

regardless of whether they were continuously enrolled.
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graduation.6 “Non-traditional Completers” are individuals who stop school after high school 

but eventually enroll in and earn some kind of college degree. The distinction between nontraditional and traditional completers is important because these students likely differ in 

unobserved dimensions (e.g., type of school attended and age at completion) that affect future 

income trajectories.7 “Non-completers” are individuals who attended some college (possibly 

right after high school) but never earned a two-year or four-year degree.8 “High school only” 

individuals complete high school or the equivalent and never enroll in postsecondary 

education.

For simplicity, we omitted some education groups from our analysis: those who earn a terminal 

Associate’s degree immediately after high school, graduate degree holders, and those who 

never finish high school. In the NLSY, it is relatively rare to see individuals immediately go from 

high school to complete a two-year degree, so we omitted this group for brevity. Individuals 

with a graduate degree are about 6 percent of each cohort, and high school non-completers are 

about 12-13 percent. Since workers with advanced degrees tend to have higher earnings and 

labor force attachment (while the opposite is true for high school dropouts), these omissions 

mean we underestimate the differences in outcomes between college graduates and the other 

education categories. Leaving out three education categories means that results in this brief 

based on the analytical sample will not be representative of the population of young adults as a 

whole. However, where more representative statistics are of interest, we provide them.

One drawback of the NLSY is small sample size; Table 1 shows that while there are almost 9,000 

individuals in the 1979 cohort that we will analyze, the comparable figure is only 6,300 for the 

1997 cohort.9 The time coverage of the 1979 NSLY means we have up to 30 years of labor 

market experience for that cohort. However, the 1997 NLSY covers at most 16 years, meaning 

we will not have many observations past T=10 (i.e. ten years after first leaving school) in this 

cohort. Comparisons across cohorts therefore will primarily look at outcomes through Year 10. 

Further splitting the sample, say by education, gender, or time in the labor force, will result in 

some cells that have very few observations. Year-to-year differences may be due to small 

sample sizes, so our analysis will emphasize overall trends. 

 

6 We cannot differentiate between undergraduate and graduate enrollment, so “Traditional BA” could include 

individuals who finished a four-year degree and dropped out of a graduate program.

7 Note that students who take a “gap year” between high school and college would not be included in the 

Traditional BA bin. Insofar as students who take a gap year are more similar in unobservables to those who 

directly enroll in college, this will underestimate the difference in earnings between Traditional BA and the other 

education groups.

8 This Non-completer group also includes people who complete a certificate program since they have some college 

enrollment but no degree.

9 The analytical sample, where we excluded graduate degree holders, high school dropouts, and those who 

completed an Associate’s degree immediately after high school, preserves the majority of respondents in the 

original data. The 1979 NLSY’s non-military sample was approximately 11,000 individuals, and the 1997 cohort 

was about 9,000, implying that the subset of observations we use here are 70-80 percent of the original.
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Cyclical Considerations

One potential issue with a cohort-level analysis is that people in each cohort would experience 

roughly the same economic conditions, but that these conditions may differ substantially 

between the 1979 and 1997 cohorts. For example, the older cohort would have started 

working in the 1980s, and the first few years of labor market experience may have been 

affected by the 1980s recession, depending on when exactly they finished school. However, 

the younger cohort, because they started working in the early 2000s, would probably not have 

been affected by a recession and would have experienced a period of economic growth in their 

first few years. Then it would be difficult to tell the extent to which differences in earnings 

between the two cohorts were due to changes in the age-earnings profile or just due to 

differences in macroeconomic factors at the time these individuals started working. While we 

do not adjust for this issue in the following figures, we explicitly marked the observations that 

might have been directly affected by cyclical downturns with squares.10 

 

10 An education-year bin is marked if more than half of the observations in that bin occurred during a recession. 

The 2001 recession is included in this calculation but does not appear in the figures because the 1997 cohort was 

graduating high school in 1998-2002. Since most of this cohort had not finished high school by 2001, none of those 

education-year bins will have more than half of observations happening in 2001. 

Total Men Women Total Men Women

Analytical sample 8,806 4,260 4,546 6,259 3,256 3,003

 Traditional BA 1,143 555 588 965 426 539

 Non-trad Completer 1,581 674 907 925 392 533

 Non-completer 2,223 1,018 1,205 2,531 1,306 1,225

 High school only 3,859 2,013 1,846 1,838 1,132 706

Note: Analytical sample sample limited to those who have at least a high school degree and less 

than a graduate degree. Individuals who have a terminal Associate’s degree immediately after 

high school are also omitted. Completion status determined by last observed highest educational 

attainment, typically ages 19 to 25 in both cohorts. Traditional BAs are students who completed a 

BA without any gap in enrollment before or during college. Non-traditional Completers completed 

an AA or BA but had an enrollment gap before completion. Non-completers attended with or 

without continuous enrollment but did not complete a degree. The HS only group finished high 

school but never attended college.

1979 NLSY 1997 NLSY

Table 1: Sample Size, by Education and NLSY cohort 
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Comparing the Early Earnings of the 1979 and 1997 Cohorts

Typical Earnings of Young Adults

We start by looking at how much young adults typically earn and how that has changed over 

time. Figure 2 shows the average annual earnings at age 20, 25, and 30 in 2013 dollars. This 

figure is based on the NLSY datasets, which follow cohorts reaching early adulthood in the 

1980s and early 2000s. At age 20, the typical full-time worker in the 1979 cohort earned 

approximately $27,000 (inflation adjusted), which grew to $38,000 at age 25, and $47,000 at 

age 30. Twenty-year olds working full-time in the 1997 cohort, by contrast, earned $22,000, 

substantially less than the prior cohort at the same age. However, the 1997 cohort’s earnings 

rapidly catch up – at 25 years old they are about the same, and earnings at age 30 are slightly 

higher than the 1979 cohort.

These differences in the early age-earnings profile between the 1979 and 1997 cohorts reflect 

many factors, including changes in the characteristics of full-time workers at each age. For 

example, in the 1979 NLSY, 21 percent of people working full-time at age 20 had not graduated 

high school, compared to 32 percent in the 1997 cohort. Because the education levels of those 

who choose to work at age 20 is different between the two cohorts, the typical earnings of 

working 20-year-olds will also be different. Because higher education has large effects on when 

27,424

22,084

37,824 37,748

47,392 49,290

0

10,000

20,000

30,000

40,000

50,000

1980s 2000s 1980s 2000s 1980s 2000s

Figure 2: Earnings of Young Adults by Age

Average Annual Earnings ($2013)

Age 20 Age 25 Age 30

Notes: Based on the 1979 and 1997 National Longitudinal Surveys of Youth. Survey respondents in the 1979 cohort were 

finishing high school and starting work in the early 1980s; those in the 1997 cohort were completing high school and starting

work in the early 2000s. Includes only full-time full year workers, defined as working at least 35 hours a week for 50 weeks a 

year.
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individuals in their 20s start working and how much they earn, the remainder of our analysis 

will look at how labor market outcomes changed over time within particular education 

groups.11 

Earnings by Education

Figure shows the salaries for full-time men (upper panels) and full-time women (lower panels) 

for the two NLSY cohorts. Looking first at men, the salaries for full-time workers at each level of 

education in the 1997 cohort start at lower levels in inflation-adjusted dollars than those of the 

1979 one. In the 1979 cohort, three of the four education categories earn about $40,000 upon 

labor market entry, but this figure has dropped to about $30,000 in the 1997 cohort. 

Traditional BAs in the 1997 cohort start at about $40,000, but it is difficult to tell whether this is 

a drop from the 1979 cohort since the early cohort’s starting value is imprecisely estimated.12 

By Year 10, incomes for Traditional BAs and High school only look relatively similar across 

cohorts, suggesting that even though starting incomes were lower in the more recent cohort, 

they grew fast enough to reach about the same level by Year 10. 

For women, the story is relatively similar. Starting incomes were somewhat lower in the 1997 

cohort, but Year 10 incomes among Traditional BAs and High school only were approximately 

the same. This implies that the gender gap in earnings within each education level is similar 

within each cohort. Traditional BA women earn about 77 percent of Traditional BA men 

through Year 10 in the 1979 cohort, compared to 80 percent in the 1997 cohort. High school 

only women in the 1979 cohort earned 69 percent of what similarly educated men earned, and 

slightly more (73 percent) in the 1997 cohort.

 

11 There may also be macroeconomic differences where, for example, 20 year olds are in a recession in one cohort 

but not another. While we cannot directly account for the cyclical impact on earnings profiles, we will briefly 

return to this issue in our comparisons of earnings between the two cohorts.

12 The T=0 average salary for Traditional BAs in 1979 is comprised 55 observations. In addition, we do not see a 

drop in the average salaries for all men, suggesting that the early decline among men is probably due to sample 

size.
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Figure 3: Labor Earnings through Year 10, By Gender and Cohort

Notes: Based on the 1979 and 1997 National Longitudinal Surveys of Youth. Includes only fulltime full year workers, defined as working at least 35 hours a week for 50 weeks a year. Squares 

denote education-year combinations where more than half of the observations were during a 

recession. Averages include only positive reported salaries.

The squares associated with the Great Recession can be seen in both right-hand panels. 

Because different education groups tend to enter the labor market in different years, the 

recession affects them at slightly different points in their working lives. Years 3-5 for 

Traditional BAs may all have been heavily influenced by the timing of the recession, as well as 

Year 7-9 for the High school only group. Therefore, these outcomes were probably worse than 

they would have been if economic times were normal. There are not very many squares in the 

left-hand panels, so the average earnings in the 1979 cohort are not as severely impacted by 

the difference in macroeconomic conditions at the time of labor market entry.13

 

13 While the squares mark years observed during a recession, downturns may influence earnings for many years 

after. For example, economic recoveries may happen at different speeds, so earnings may stay lower for workers 

0

20

40

60

80

0 2 4 6 8 10

Years since first leaving school

Trad BA

Non-trad Comp Non-Comp

HS only

1979 Cohort, Men

Average Earnings (Thousands of $2013)

0

20

40

60

80

0 2 4 6 8 10

1997 Cohort, Men

Average Earnings (Thousands of $2013)

Years since first leaving school

Trad BA

Non-trad Comp

Non-Comp HS only

0

20

40

60

80

0 2 4 6 8 10

1979 Cohort, Women

Average Earnings (Thousands of $2013)

Years since first leaving school

Trad BA

Non-trad Comp Non-Comp HS only

0

20

40

60

80

0 2 4 6 8 10

1997 Cohort, Women

Average Earnings (Thousands of $2013)

Years since first leaving school

Trad BA Non-trad Comp Non-Comp

HS only
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While the patterns of salary changes look similar between men and women, there are clear 

differences by education. As discussed earlier, workers with a Traditional BA earn significantly 

more than the Non-traditional Completers and the Non-completers in every panel. But the 

outcomes of Non-traditional Completers have diverged from those of Non-completers in the 

1997 cohort, even though they were very similar in the 1979 cohort. In the 1979 cohort, both 

Non-traditional Completers and Non-completers earned more than workers with a terminal 

high school diploma. In the 1997 cohort, however, the earnings trajectories for Non-traditional 

Completers were closer to that of Traditional BA workers while that of Non-completers looked 

more like High school only workers. After T=10, this gap between Non-traditional Completers

and Non-completers is unlikely to close since the earnings gaps typically widened with labor 

market experience, as we will see at the end of this brief.

Changes in Labor Market Attachment

So far, most of this brief has focused on full-time workers. But earnings are only one labor 

market outcome, and changes in how young adults transition into the labor market more 

broadly also affect economic security. How much time do young adults spend unemployed or 

out of the labor force entirely instead of working? Have those tendencies changed over time? 

For this analysis, we look at the average number of years individuals spend employed, 

unemployed, and out of the labor force in the first six years after leaving school.

Figure 4 shows how the young adults in the analytical sample spent their early working years. 

As mentioned earlier, the focus on just the analytical sample means we underestimate the 

difference in outcomes between college and non-college individuals. Overall, there are few 

differences in labor market attachment between the 1979 and 1997 cohorts, with both 

spending about one-third of a year unemployed, one year out of the labor force, and 4.5 years 

employed. The Unknown category, which reflects incomplete data, makes up about 2 weeks 

out of the full 6 year period.14

 

coming out of the Great Recession compared to those existing the 1980s recession. New workers who start 

working during recessions may also experience labor market “scarring”, meaning their earnings take longer to 

recover compared to workers with similar characteristics who began to work just before the downturn.

14 “Unknown” observations could be “not employed, reason unknown”, which means the NLSY could not 

determine whether the individual was unemployed or entirely out of the labor force, or missing entirely from that 

week’s work history.
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The overall pattern, however, masks differences between men and women. Young men now 

spend more time out of the labor force than before, while women have become more likely to 

work. As a result, the 1997 cohort has similar, though not identical, labor force participation 

patterns for young men and women. The increase in women’s labor force participation 

between the 1979 and 1997 cohorts is partially due to women having children later—54 

percent of women in the 1997 cohort have a child by Year 5, compared with 58 percent in the 

1979 cohort—and partly due to increased employment among women with children.15 There is 

little change in unemployment over time, with both men and women in both cohorts spending 

about 4-5 months unemployed within the first six years of work.

Figures 7 and 8 disaggregate the labor force status of men and women by education. For 

simplicity, these figures show only unemployment and being out of the labor force; the rest of 

the bar up to six years would primarily be “employed.” For both men and women in both 

cohorts, those with higher levels of education have shorter bars, meaning those with higher 

education spend more time employed and less time unemployed or out of the labor force. For 

both men and women, High school only individuals spend at least twice as much time in nonemployment than Traditional BA. Non-traditional Completers and Non-completers are in 

between, consistent with many of the other trends we have seen thus far.

 

15 The probability of having a child at home has also declined for men, from 37 percent to 31 percent.

0

1

2

3

4

5

6

1979 1997 1979 1997 1979 1997

Figure 4: Labor Market Attachment through T=5, By Gender and Cohort

Average number of years

Employed

Not in 

labor force

Unemployed

Unknown

Analytical Sample Men Women

Notes: Analytical sample limited to those who have at least a high school degree and less than a graduate degree. Individuals who have a 

terminal Associate’s degree immediately after high school are also omitted. Completion status determined by last observed highest 

educational attainment, typically ages 19 to 25 in both cohorts. Traditional BAs are students who completed a BA without any gap in 

enrollment before or during college. Non-traditional completers completed an AA or BA but had an enrollment gap before completion. 

Non-completers attended with or without continuous enrollment but did not complete a degree. The HS only group never attended 

college. The year a student last enrolled in school is T=0, so there are up to six years of observations through T=5. “Employed” includes 

serving in the military. “Not in LF” includes students who do not report another labor market status. Calculated from the weekly work 

histories in the NLSY.
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The gender patterns seen in the overall results also occur within education categories. Young 

men in every education group in the 1997 cohort spend more time out of employment than 

those from in 1979 cohort. This is because of a decline in labor force participation that is 

evident in all education groups and most evident among the least educated.

While young men’s employment was falling, women’s employment was rising. Increases in 

women’s employment are largest among Non-traditional Completers, who work an additional 

0.3 years, and about an additional 0.1 years employed among Traditional BAs and Noncompleters.16

 

 

16 Employment for High school only women was relatively unchanged, due to increases in the “Unknown” status 

between 1979 and 1997 (not shown).

0

0.5

1

1.5

2

79 97 0 79 97 0 79 97 79 97 79 97

Figure 5: Non-Employment through T=5, Men

Average number of years

Non-trad 

Comp

Analytical Trad BA Non-comp HS Only

Sample

Not in 

labor force

Unemployed

1979 1997 1979 1997 1979 1997 1979 1997 1979 1997

Notes: Analytical sample limited to those who have at least a high school degree and less than a graduate degree. Individuals who 

have a terminal Associate’s degree immediately after high school are also omitted. Completion status determined by last observed

highest educational attainment, typically ages 19 to 25 in both cohorts. Traditional BAs are students who completed a BA without 

any gap in enrollment before or during college. Non-traditional Completers completed an AA or BA but had an enrollment gap 

before completion. Non-completers attended with or without continuous enrollment but did not complete a degree. The HS only 

group finished high school but never attended college. The year a student last enrolled in school is T=0, so there are up to six years 

of observations through T=5. “Employed” includes serving in the military. Calculated from the weekly work histories in the NLSY.
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Volatility in Incomes

The final aspect of early labor market outcomes we explore is year-to-year volatility in salaries 

and how it varies by education and across cohorts. Earnings volatility is an important aspect of 

financial well-being because even if average earnings are increasing, individuals may experience 

large drops in earnings that may cause financial hardship. For this section, we define an income 

“shock” as the percentage change between this year and last year’s reported earnings. We 

condition on having positive earnings in both years to minimize the effects of misreported 

zeroes and missing values on our results.17 However, we note that doing so limits our analysis 

because it means that we are ignoring correctly reported zeroes that would indicate a year 

without income, which in many cases would be associated with great hardship. Also, earnings 

may be reported with substantial error, as is typical in self-reported surveys, which leads to 

higher measured volatility. If measurement error is relatively similar across education levels 

and cohorts, the qualitative comparisons should hold.

 

17 In the 1979 cohort, 18 percent of person-year observations are missing and 20-25 percent are reported as zeros. 

In the 1997 cohort, 40 percent of person-year observations are missing and less than 1 percent are reported as 

zeros. For consistency between the two cohorts, we treated all reported zeros as missing values in this analysis.

0

0.5

1

1.5

2

2.5

79 97 0 79 97 0 79 97 79 97 79 97

Figure 6: Non-Employment through T=5, Women

Average number of years

Non-trad 

Comp

Analytical Trad BA Non-comp HS Only

Sample

Not in 

labor force

Unemployed

1979 1997 1979 1997 1979 1997 1979 1997 1979 1997

Notes: Analytical sample limited to those who have at least a high school degree and less than a graduate degree. Individuals who 

have a terminal Associate’s degree immediately after high school are also omitted. Completion status determined by last observed

highest educational attainment, typically ages 19 to 25 in both cohorts. Traditional BAs are students who completed a BA without 

any gap in enrollment before or during college. Non-traditional Completers completed an AA or BA but had an enrollment gap 

before completion. Non-completers attended with or without continuous enrollment but did not complete a degree. The HS only 

group finished high school but never attended college. The year a student last enrolled in school is T=0, so there are up to six 

years of observations through T=5. “Employed” includes serving in the military. Calculated from the weekly work histories in the 

NLSY.
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Table 2 presents the distribution of year-over-year percent changes in salary between T=2 and 

T=5 for both NLSY cohorts.18 Looking first at the 1979 cohort, the median shock is +7 percent, 

meaning that a typical individual will have salary that is 7 percent higher this year than last, and 

the 75th percentile is +35 percent. The bottom quarter of income shocks are negative and quite 

large (-9 percent at the 25th percentile), meaning that substantial salary declines are not 

uncommon for young adults just entering the labor market.

The median shock is relatively similar across all education levels, but the distribution is 

compressed for those with more schooling, meaning that those with more education tend to 

have smaller changes in earnings from one year to the next. Traditional BAs have relatively few 

negative shocks (the 25th percentile is -3 percent) and relatively few large shocks (the 75th

percentile is +26 percent). Non-traditional Completers and Non-completers look relatively 

similar, with a 25th percentile that is slightly more negative than that of Traditional BAs, and a 

75th percentile that is noticeably higher. Those with only a high school diploma have the most 

negative 25

th percentile (-13 percent) and also the highest 75th percentile (+41 percent).

Compared with the 1979 cohort, the distribution of shocks in the 1997 cohort is slightly higher 

on the high end. The25th percentile and median are about the same as the previous cohort and 

the 75th percentile is higher. The median salary shock is +8 percent, compared to 7 percent 

previously, but the bottom end is -9 percent, which is which close to the previous cohort. The 

top quarter of shocks in the 1997 cohort is about +42 percent, which is larger than the +35 

percent before. In general, a rightward shift in the distribution means more positive shocks with 

 

18 We start at T=2 because that is the first income shock (i.e., between T=1 and T=2) that reflects a full year of 

potential labor market experience. Changes in salary between T=0 and T=1 are confounded by the fact that the 

T=0 salary reflects individuals who worked only a portion of the year and were in school for the remainder.

N

25th 

percentile

50th 

percentile

75th 

percentile N

25th 

percentile

50th 

percentile

75th 

percentile

Analytical sample 32,736 -8.5% 7.0% 35.4% 21,272 -8.7% 8.3% 41.9%

 Traditional BA 4,367 -3.3% 7.9% 25.8% 3,430 -3.3% 8.0% 33.2%

 Non-trad Completer 6,015 -8.4% 7.8% 40.2% 3,091 -8.5% 8.7% 45.1%

 Non-completer 7,938 -6.9% 6.7% 34.7% 8,578 -11.7% 7.5% 41.3%

 High school only 14,416 -12.9% 6.1% 40.9% 6,173 -12.1% 10.5% 50.1%

1979 cohort 1997 cohort

Table 2: Distribution of Year-to-Year Changes in Real Annual Salary through T=5

Notes: Analytical sample limited to those who have at least a high school degree and less than a graduate degree. 

Individuals who have a terminal Associate’s degree immediately after high school are also omitted. Completion status 

determined by last observed highest educational attainment, typically ages 19 to 25 in both cohorts. Traditional BAs are 

students who completed a BA without any gap in enrollment before or during college. Non-traditional Completers completed 

an AA or BA but had an enrollment gap before completion. Non-completers attended with or without continuous enrollment 

but did not complete a degree. The HS only group finished high school but never attended college. An observation is a personyear. The panel is unbalanced; some individuals have complete work histories through T=5 while others only have a few years 

of salary observations. Observations that report zero or missing salary are excluded.
15

The Economic Security of American Households

Issue Brief Two

little change in negative shocks, so in this sense, the 1997 cohort is better off than the 1979 

one. One important caveat is that the analysis is conditioned among those who had positive 

earnings in two consecutive years, which may have been less likely during the Great Recession.

Within education levels, most of the distributions for the 1997 cohort are relatively similar to 

those from the 1979 cohort, except with a higher 75th percentile. The exception seems to be 

for Non-completers, whose 25th percentile is more negative than before. In other words, Noncompleters are more likely to experience salary declines (and they are likely to be larger) in the 

1997 cohort than in the 1979 cohort. This is potentially another reason to focus on noncompleters as a policy priority.

In addition to looking at the distribution of year-over-year shocks, we can focus on just the 

probability of large negative shocks, defined here as larger than 10 percent from one year to 

the next. Per Table 2, this is near the 25th percentile in both cohorts, so this definition identifies 

salary declines that are somewhat large but not extraordinarily rare. 

The first row of Table 3shows the probability of having a large negative shock across the 

different categories. In the 1979 cohort, there is approximately a one-in-four chance of a large 

(10 percent) decline in salary in any given year, but this ranges between 16 percent for 

Traditional BA to nearly 28 percent for those with a high school diploma. In other words, those 

with more education are less likely to experience large drops in earnings from one year to the 

next. The probability of having a large earnings decline is not very different between the two 

cohorts conditional on education.

Negative income shocks could reflect changes in earnings (without a meaningful 

unemployment spell) or changes in employment, and here we attempt to differentiate between 

them by looking at whether employment status changed in the year of the shock. We define an 

Trad BA Non-Trad Non-Comp HS only Trad BA Non-Trad Non-Comp HS only

Chance of:

 10+ pct earnings drop 15.9% 23.7% 22.3% 27.5% 16.5% 23.1% 26.7% 26.9%

 Having unemp spell 7.6% 14.3% 14.7% 22.3% 7.2% 9.8% 15.1% 18.5%

Chance of an Earnings Drop Conditional on:

 Unemp spell 48.1% 45.3% 40.5% 46.3% 37.0% 39.1% 40.2% 35.3%

 No unemp spell 13.3% 20.1% 19.2% 22.0% 14.9% 21.3% 24.2% 25.0%

1979 cohort 1997 cohort

Table 3: Probability of Large Decline in Real Annual Earnings through T=5

Notes: Completion status determined by last observed highest educational attainment, typically ages 19 to 25 in both cohorts. Traditional 

BAs are students who completed a BA without any gap in enrollment before or during college. Non-traditional Completers completed an 

AA or BA but had an enrollment gap before completion. Non-completers attended with or without continuous enrollment but did not 

complete a degree. The HS only group finished high school but never attended college. An observation is a person-year. Observations that 

report zero or missing salary are excluded. Large negative shocks are defined as a decline in salary between this year and last year of 10 

percent or more. Unemployment spells are defined as having a 4+ week consecutive spell of unemployment in the year.
16

The Economic Security of American Households

Issue Brief Two

“employment lapse” as a year where the individual had a 4+ week spell of continuous 

unemployment. Note that this definition tends to underestimate the probability of an 

employment lapse since short spells of unemployment and any spells of non-participation (e.g., 

becoming discouraged or leaving work to attend school) are not counted as unemployment. 

The second row of Table 3 shows that there is a 7-8 percent probability of unemployment for 

Traditional BAs and much higher probabilities (19-22 percent) for those who are High school 

only (22 percent). 

The bottom two rows of the table show that the probability of having a significant earnings 

decline differs depending on whether there was an unemployment spell in the same year. 

Those with an unemployment spell had a 35-48 percent chance of having a substantial earnings 

drop in both cohorts. Without an unemployment spell, Traditional BAs have a 13-15 percent

chance of an earnings drop whereas other groups have a 20-25 percent chance of earnings loss 

in the absence unemployment. It appears that earnings drops are somewhat less likely to be 

due to unemployment spells than in the past. Note that the conclusions for Table 3 do not 

change much if we include the zeros and missing earnings as income changes.19

Student Loans

As we have seen, higher education is strongly connected to higher earnings. However, the cost 

of college has increased much faster than typical family incomes. For example, median 

household income in 1986 was about $25,00020 while a year of tuition and room and board at a 

public four-year school that year was $3,900.21 Since then, both have increased, with median 

household income nearly doubling by 2015 but the cost of college increasing almost fivefold. 

As a result, one year at an in-state public four-year college now costs nearly 32 percent of the 

median household’s income in 2015 compared to 16 percent in 1986. Some of this increase 

reflects macroeconomic factors, but a substantial rise in the cost burden of college occurred 

even before the Great Recession.22

Given this rise in the cost of college relative to incomes, it is not surprising that many more 

students might need to borrow to attend college. The average cumulative debt for an 

undergraduate finishing a four-year degree in 2000 was $20,400 (in 2013 dollars) and this had 

 

19 Specifically, if we treated missing values as infinitely large earnings changes, the absolute level of earnings 

shocks increases by 2-3 percentage points across the board, but the trends over time and across educational 

categories remain the same.

20 U.S. Census Bureau, Table H-6 regions-by Median and Mean Income. http://www.census.gov/data/tables/timeseries/demo/income-poverty/historical-income-households.html.

21 College Board, Trends in College Pricing 2015, Table 3. https://trends.collegeboard.org/sites/default/files/cp2015-table-3.xls. 

22 In 2000, the cost would have been about 20 percent of household income, but by 2005, it was already 25 

percent.
17

The Economic Security of American Households

Issue Brief Two

increased to $23,400 in 2012.23 The NLSYs have few questions about student lending, but from 

those data, we can see that probability of having student debt has increased between the two 

cohorts. Table 4 shows that in the 1997 cohort overall, 37 percent of all young adults had ever 

had a student loan, up from 30 percent in the 1979 cohort.24 The likelihood of borrowing 

increased substantially for Non-traditional Completers, from 50 percent to 70 percent.

Note that while Non-traditional Completers had the largest increases in borrowing between the 

two cohorts, their income trajectories became closer to those of traditional graduates. This 

suggests that at least some of this increase in borrowing results in increased human capital 

(e.g., students spending more time in school in order to get four-year degrees instead of twoyear ones), and this kind of borrowing may be financially sustainable and less of a policy 

concern.25

 

23 Computed using the 2000 and 2012 National Postsecondary Student Aid Surveys. Some of the increase in 

cumulative debt at graduation is driven by changes in the type of school students attend. For those finishing at 

public four-year schools, cumulative debt has not increased much (from $23,400 to $25,000) while at for-profits, 

debt increased from $14,500 to $23,300.

24 While there are other questions about the level of student loan debt in the NLSY, this one is the only one that is 

asked consistently across both cohorts and over time.

25

 The degree composition among Non-traditional Completers in the NLSYs has indeed shifted from two-year 

Associate’s degrees and toward four-year Bachelor’s degrees. In the 1979 cohort, nearly one-third of Nontraditional Completers completed a four-year degree, but this has doubled in the 1997 cohort.

NLSY 79 NLSY 97 NLSY 79 NLSY 97 NLSY 79 NLSY 97

All young adults 30.2 36.7 28.7 31.4 31.8 42.2

Analytical sample 29.2 37.7 28.3 32.3 30.1 43.7

 Traditional BA 61.2 65.1 61.8 62.6 60.5 67.1

 Non-trad Completer 50.4 69.5 49.8 66.4 50.9 72.0

 Non-completer 36.9 38.5 38.3 35.6 35.5 41.9

 High school only 2.7 0.6 2.2 0.5 3.3 0.7

Table 4: Share that Ever Had a Student Loan

Notes: The “All young adults” row is the population estimate for the entire NLSY cohort, including 

those who received a graduate degree, went directly from high school to a terminal AA degree, or did 

not complete high school. Analytical sample limited to those who have at least a high school degree 

and less than a graduate degree. Individuals who have a terminal Associate’s degree immediately 

after high school are also omitted. Completion status determined by last observed highest 

educational attainment, typically ages 19 to 25 in both cohorts. Traditional BAs are students who 

completed a BA without any gap in enrollment before or during college. Non-traditional Completers 

completed an AA or BA but had an enrollment gap before completion. Non-completers attended with 

or without continuous enrollment but did not complete a degree. The HS only group finished high 

school but never attended college.

Total Men Women
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The Economic Security of American Households

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Although the borrowing propensity of Non-completers did not change as much, from 37 to 39 

percent, these individuals are a much larger share of young people today. Thus, given the much 

lower earnings trajectories of Non-completers, many more individuals may be at risk of having 

a debt-financed postsecondary experience that does not pay off, on net, in the long-run. 

Completion is a key concern, both for individuals deciding whether to attend (and especially 

how to pay for) college and for higher education policymakers. In particular, many college 

students pay for higher education using student loans, and student loans must be repaid 

regardless of completion status. Given the decline in the earnings premium to attending 

without completing, prospective borrowers should carefully consider their own completion 

probability before taking on student debt. Another reason that college completion is an 

important policy priority is that non-completers may not earn enough to repay their loans, 

which could lead to economic hardship, including lack of access to other forms of credit later in 

life.

Non-Labor Market Markers of Adulthood

So far, this brief has examined labor market outcomes for young adults. However, working is 

only one aspect of the transition into adulthood, and in this section, we look at other markers 

of adulthood to see how those have changed between the two NLSY cohorts.

Homeownership

Homeownership patterns of young adults are of interest to policymakers. While the financial 

crisis exposed some of the risks associated with homeownership, owning a home is still an 

important means for households to build wealth. The earlier households begin to own a home, 

the earlier this wealth can begin to accumulate. Table 5 shows the share of individuals who 

report owning their current residence at a particular age.26

 

26 The asset questions in the 1997 NLSY are only asked when the individuals reach specific ages, so we cannot 

construct annual homeownership rates.
19

The Economic Security of American Households

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Unsurprisingly, individuals become more likely to own a home as they get older. Nearly half of 

individuals in the 1979 cohort owned a home in the year they turned 30, up from a quarter at 

age 25. There is also a very clear education pattern. At age 20 and 25, those who had only a 

high school diploma were the most likely to own a home, presumably because they had 

completed their education and were settling down. However, this group was the least likely to 

own a home at age 30, implying that homeownership rates among college-goers eventually 

caught up and surpassed that of the High school only group. The gap in ownership between 

Traditional BA and High school only was about 13 percentage points by age 30 in the 1979 

cohort.

The 1997 cohort shows the same increase in the propensity to own a home with age and also 

showed those with more education catching up and surpassing their less educated 

counterparts. However, one very notable change is that homeownership rates for young adults 

fell substantially between the 1979 and 1997 cohorts, and this is pervasive across all education 

levels. This decline is shown in Figure . Whereas a quarter of individuals in the 1979 cohort 

owned a home at age 25, this has fallen to 15 percent for the 1997 cohort. Homeownership at 

age 30, which was 50 percent in the old cohort, has fallen to 28 percent. Traditional BAs have 

the highest homeownership rates at age 25 and 30 while high school only individuals are the 

least likely to own at age 30. The Traditional BA-high school gap has increased to 19 percent, so 

the ownership gap between those who finish college and those who do not has grown over 

time rather than decreased. While fewer 30-year-olds today own a home compared to a 

generation ago, we cannot tell if this decline reflects delays in home buying or more permanent 

Age 20 Age 25 Age 30 Age 20 Age 25 Age 30

All young adults 8.2 25.0 47.4 2.4 14.4 28.2

Analytical Sample 8.0 26.3 49.1 2.5 14.6 28.2

 Traditional BA 3.7 20.1 58.4 1.6 17.4 39.6

 Non-trad Completer 6.5 23.0 50.6 1.7 15.8 34.2

 Non-completer 6.9 24.8 46.5 2.5 14.2 25.2

 High school only 10.5 31.3 45.9 3.6 12.6 20.9

Notes: The “All young adults” row is the population estimate for the entire NLSY cohort, including 

those who received a graduate degree, went directly from high school to a terminal AA degree, or 

did not complete high school. Completion status determined by last observed highest 

educational attainment, typically ages 19 to 25 in both cohorts. Traditional BAs are students 

who completed a BA without any gap in enrollment before or during college. Non-traditional 

Completers completed an AA or BA but had an enrollment gap before completion. Non-completers 

attended with or without continuous enrollment but did not complete a degree. The HS only group 

finished high school but never attended college. 

1979 NLSY 1997 NLSY

Table 5: Share that Own Current Home
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The Economic Security of American Households

Issue Brief Two

declines in homeownership. It is also not clear whether these trends will persist as economic 

conditions normalize.

Figure 7: Homeownership at Age 20, 25, and 30

Notes: Completion status determined by last observed highest educational attainment, typically 

ages 19 to 25 in both cohorts. Traditional BAs are students who completed a BA without any 

gap in enrollment before or during college. Non-traditional Completers completed an AA or BA 

but had an enrollment gap before completion. Non-completers attended with or without 

continuous enrollment but did not complete a degree. The HS only group finished high school 

but never attended college. 

Living with a Spouse

Another adulthood milestone is family formation, which we examine here using spousal 

cohabitation. Cohabitation, as opposed to marriage alone, is interesting because it can relate 

to homeownership and because it can be compared with other living situations. Table 6 shows 

the share of individuals living with a spouse. As with the homeownership figures, we present 

the share currently living with a spouse at a given age. In the 1979 NLSY, 18 percent of 20 year 

olds lived with a spouse, and this increased to 46 percent at age 25 and 62 percent at age 30. 

Traditional BAs were the least likely to live with a spouse at ages 20 and 25, likely because they 

were still in school, but they caught up and passed the other education categories by age 30.

0

20

40

60

20 25 30

Share that own current home, 1997 NLSY

Trad BA

Non-trad Comp

Non-Comp

HS only

Age

0

20

40

60

20 25 30

Share that own current home, 1979 NLSY

Trad BA

Non-trad Comp Non-Comp HS only

Age
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The Economic Security of American Households

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Spousal cohabitation declined at all ages and across all education categories between 1979 and 

1997. Overall, 48 percent of 30 year olds in the 1997 cohort lived with a spouse, a 13 

percentage point decline from 1979. Declines were the largest for those with less education; 

spousal cohabitation at age 30 fell 4 percentage points among Traditional BAs (from 67 to 63 

percent) but 18 percentage points for High school only individuals. 

Interestingly, rates of cohabitation did not change much if we include those living with an 

unmarried partner (see Figure 8). Nearly 70 percent of 30 year olds in the 1997 cohort lived 

with a spouse or partner, which is almost the same level as 30 year olds in the 1979 cohort. 

While the definition of “partner” is left unspecified by the survey, these trends suggest that 

living arrangements for young adults may not be changing as much as delays in marriage would 

imply.

Age 20 Age 25 Age 30 Age 20 Age 25 Age 30

All young adults 19.3 45.0 60.9 7.3 30.3 48.7

Analytical sample 17.9 45.6 61.8 6.7 29.5 48.3

 Traditional BA 2.7 35.9 67.1 1.6 32.4 62.9

 Non-trad Completer 12.2 43.3 61.7 4.6 28.6 47.0

 Non-completer 16.7 44.3 57.8 8.0 30.4 45.3

 High school only 27.1 51.3 61.8 10.0 26.8 43.5

Notes: The “All young adults” row is the population estimate for the entire NLSY cohort, including 

those who received a graduate degree, went directly from high school to a terminal AA degree, or 

did not complete high school. Completion status determined by last observed highest educational 

attainment, typically ages 19 to 25 in both cohorts. Traditional BAs are students who completed a 

BA without any gap in enrollment before or during college. Non-traditional Completers completed 

an AA or BA but had an enrollment gap before completion. Non-completers attended with or 

without continuous enrollment but did not complete a degree. The HS only group finished high 

school but never attended college. 

1979 1997

Table 6: Share that Live With A Spouse 
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The Economic Security of American Households

Issue Brief Two

Earnings over the First 30 Years of Work for the 1979 NLSY Cohort

Thus far, we have only looked at early adulthood outcomes since the 1997 cohort is still 

relatively young and that is as far as their data go. However, the 1979 cohort has a much longer 

time series, and we can look at long-run earnings at different levels of higher education. Figure 

9 shows a clear education-earnings pattern – those with more education have higher inflationadjusted salaries than those with less formal schooling. For example, at Year T=10 (meaning 

ten years after first leaving school), the average salary income for a Traditional BA male working 

full-time was nearly $80,000, compared with about $45,000 for someone with a terminal high 

school diploma. 

0

20

40

60

80

100

1980s 2000s 1980s 2000s 1980s 2000s

Spouse

Figure 8: Cohabitation at Age 20, 25, and 30, All Young Adults

Share that live with spouse/partner

Partner

Age 20 Age 25 Age 30

Notes: Based on the 1979 and 1997 National Longitudinal Surveys of Youth, including those who received a graduate degree, went 

directly from high school to a terminal AA degree, or did not complete high school. Survey respondents in the 1979 cohort were finishing 

high school and starting work in the early 1980s; those in the 1997 cohort were completing high school and starting work in the early 

2000s.
23

The Economic Security of American Households

Issue Brief Two

Figure 9 also shows the income profiles for Non-traditional Completers and Non-completers. 

Both groups appear to do better than those with only a high school diploma at all years of 

(potential) labor market experience, but Non-traditional Completers and Non-completers 

appear relatively similar through Year 10. After that, a moderate earnings gap appears 

between those who finish college and those who do not. Non-traditional Completers never 

reach the earnings of the Traditional BA group, but some of this is likely due to the fact that 

Traditional BA individuals all have a four-year degree, while Non-traditional Completers are a 

mix of Associate’s and Bachelor’s degrees.27

 

27 The data allow us to differentiate between Associate’s and Bachelor’s degrees among Non-Traditional 

Completers, but for sample size reasons, we pooled them together.

0

20

40

60

80

100

120

140

0 5 10 15 20 25 30

Figure 9: Evolution of Labor Earnings, Men, 1979 NLSY

Average Earnings (Thousands of $2013)

Years since first leaving school

Trad BA

Non-trad 

Comp

Non-Comp

HS only

Notes: Based on the 1979 National Longitudinal Survey of Youth. Includes only full-time full year workers, defined as working at least 35 

hours a week for 50 weeks a year. Squares denote education-year combinations where more than half of the observations were during a 

recession. Averages include only positive reported earnings.
24

The Economic Security of American Households

Issue Brief Two

In the 1979 cohort, women had lower earnings than men at every education level, even among 

those working full-time (see Figure 10). For example, women who finished college right after 

high school earned about $60,000 by Year 10, compared to $80,000 for men at the same 

education level. However, the educational patterns among women are roughly similar to those 

for men – women with more education have higher salaries over their working lives compared 

with those with less education, and for both genders Traditional BAs earn about 65 percent 

more over the first 30 years than those who attended high school only. 

Conclusion

Changes in the labor force and the U.S. economy have altered the experience of workers who 

entered the labor market in the 1980s compared with those who started working in the 2000s, 

though perhaps not as much as one might expect. Salaries among young workers with the 

same level of education and working years have not changed much between these two cohorts. 

Thus, much of the income growth that has been observed is due to the fact that young people 

are pursuing more education than before. In addition, the benefits of overall economic growth 

were concentrated among graduate degree holders, who are omitted from the earnings 

analysis. 

0

20

40

60

80

100

0 5 10 15 20 25 30

Years since first leaving school

Trad BA

Non-trad 

Comp

Non-Comp

HS only

Figure 10: Evolution of Labor Earnings, Women, 1979 NLSY

Average Earnings (Thousands of $2013) 

Notes: Based on the 1979 National Longitudinal Survey of Youth. Includes only full-time full year workers, defined as working at least 35 

hours a week for 50 weeks a year. Squares denote education-year combinations where more than half of the observations were during a 

recession. Averages include only positive reported salaries. 
25

The Economic Security of American Households

Issue Brief Two

The results also show that some other markers of adulthood are delayed in the more recent 

cohort. At every education level, young people are less like to own a home at age 30 than in 

the past. Similarly, they are less like to be married, though this largely reflects a substitution 

toward unmarried cohabitation. Women are also somewhat less likely to have a child within

five years of leaving school.

The results suggest some segments of the population may merit closer policy focus. First, the 

changes in labor force attachment are trending in opposite directions for men and women. 

This increase in men’s non-participation is strongest among those without any higher 

education, so it is not solely driven by workers returning to school. 

Second, the labor market outcomes of college non-completers appear to be diverging from 

those who leave school temporarily but eventually complete a degree. Non-completers in the 

1997 cohort had better labor market outcomes than those with only a high school diploma, but 

this group fared less well than in the past. This fact, coupled with rising tuition costs, makes 

attention to non-completion an important policy issue. More broadly, support for higher 

education is critical given the persistent high return to a college degree and the stagnating 

prospects at the low end of the educational distribution. Support for low-income students is 

especially important given that higher education plays a crucial role in upward mobility, yet 

disadvantaged students may find it difficult to pay out of pocket for college or navigate the 

various processes involved.