Which degrees do students prefer during recessions?
· Rigissa Megalokonomou
Received: 5 December 2016 / Accepted: 9 January 2018
© Springer-Verlag GmbH Germany, part of Springer Nature 2018
Abstract We examine how changes in the unemployment rate affect demand for
tertiary education, demand for different ﬁelds of university study and degrees’ admis-
sion thresholds. We use panel data for applications submitted to every undergraduate
program in Greece that span seven rounds of admission cohorts combined with a
degree-speciﬁc job insecurity index, and time series on youth (ages 18–25) unem-
ployment. We ﬁnd that degree- and major-speciﬁc job insecurity turns applicants
away from degrees and majors that are associated with poor employment prospects.
Results indicate that the steep increase in the unemployment rate that started in 2009
is associated with an increase in the number of university applicants. The effect is
heterogeneous across ﬁelds, with an increase in the demand for degrees in Psychology
as well as for entrance to Naval, Police, and Military Academies, and a decrease in
the demand for degrees in Business and Management. We also ﬁnd that the business
cycle changes degrees’ admission thresholds by affecting their popularity.
Keywords Demand for education · University major · Unemployment · Job
insecurity · Admission thresholds
JEL Classiﬁcation I26 · I21 · I23 · J24
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s00181-
018-1418-7) contains supplementary material, which is available to authorized users.
Hoover Institution, Stanford University, Stanford, USA
Department of Economics, The University of Queensland, St Lucia, Australia