Demid Getik (Durham University)
Hugo Morgado Azevedo and Petra Thiemann
We examine how economic conditions shape gender differences in educational investments. Using Swedish register data and within-family variation in siblingsÂ’ exposure to local unemployment rates prior to graduating high school, we study university enrollment and major choice over the business cycle. We find that men do not increase their overall university attendance during recessions but are more likely to shift towards fields associated with lower unemployment risks. In contrast, women respond to recessions by increasing both university attendance and completion rates. However, they do not shift toward fields with lower unemployment risks or higher earnings, although many women are academically prepared for demanding degrees. In the long run, exposure to recessions during the final high school years widens the gender gap in lifetime earnings. These findings suggest that men and women use different strategies to cope with recessions, with potentially long-term economic consequences.