Unfortunately the business cycle is just that - a cycle. We don't all get to graduate in a strong labour market. So, what happens when you graduate during a recession - what are the implications?

It depends, is the correct answer. But here's a few references I draw on:

• There's a nice summary article here at the NBER, largely reflecting the United States, but pointing to long-term impacts on earnings and even mortality: "Life-Cycle Impacts of Graduating in a Recession" (By Hannes Schwandt and Till M. von Wachter, 2023)

 https://www.nber.org/reporter/2023number1/life-cycle-impacts-graduating-recession 

• Phil Oreopoulos (University of Toronto) published this article in 2012, based on Canadian data 1982-1998:

"The Short- and Long-Term Career Effects of Graduating in a Recession" https://pubs.aeaweb.org/doi/pdfplus/10.1257/app.4.1.1 

The Key result: "A typical recession—a rise in unemployment rates by 5 percentage points in our context—implies an initial loss in earnings of about 9 percent that halves within 5 years, and finally fades to 0 by 10 years. For this time period, these reductions add up to a loss of about 5 percent of cumulated earnings."  

It looks like some people (ie. who would have done very well in normal times) can recover faster than others - perhaps taking a few years to find the best job. But others may have long-term damage.

• One option, then, is to go to school when times are tough. What happens with those folks? Some students entering school when there's a recession tend to take a bit longer to finish, but this doesn't seem to harm their career earnings. 

There's an interesting working paper on this (by Cortes, Foley, and coauthors) using Canadian data here: https://www.dropbox.com/scl/fi/4kjloufrmt07nohnpwbv6/enrolling_CAN_v1.pdf?rlkey=y2xavnizfk2gfouxy6icv73vb&e=1&dl=0 

• We can also point out the 2020s have been a bit rough? The graduating class of 2020 had to deal with starting out in pandemic shutdowns. Statistics Canada had some people look at that : https://www150.statcan.gc.ca/n1/daily-quotidien/240322/dq240322b-eng.htm . 

• Also, some results on earning losses were published in 2021:

Messacar, D., T. Handler, and M. Frenette. 2021. "Predicting earnings losses from graduating during COVID-19." Canadian Public Policy 47 (2): 301–315.

Abstract: Poor labour market conditions at the start of a worker’s career can result in earnings losses for many years. The 2021 cohort of Canadian high school and post-secondary students have seen employment prospects diminish amid economic lockdowns to contain the spread of coronavirus disease 2019 (COVID-19). The goal of this article is to predict earnings losses for this cohort. We use Census of Population data to show that a 1 percent increase in unemployment at the time of graduation leads to a 1.5–4 percent average decrease in earnings. Then, using unemployment rate forecasts from various sources, we predict how this year’s graduating class is expected to fare. Our approach assumes previous recessions are informative about the effects of the current recession. We estimate that a typical 2021 graduate loses 5–12 percent of the amount they would have earned over the first few years if the pandemic had not occurred.

Interviews or comments on this:

Globe and Mail, April 17 2025, Indra Egan: "‘Last hired and first fired’: Postsecondary graduates seeking employment during a trade war have their work cut out for them"