Motivation

Beginning your career during a recession can be a real drag, for a really long time. Finding a job is obviously harder and even once you find a job, the pay is substantially smaller. According to research by Yale labour economist Lisa Kahn, people who graduate during a recession have a starting salary that is on average about 25% lower than it would have been during a boom (Kahn, 2009). Seventeen years later, those people are typically earning about 10% less than their peers who started during a better economy. As such, we can see that prolonged slowdowns, like the one currently being experienced these days, not only make their mark through the immediate pain of joblessness and depressed earnings but they have a permanent and largely malignant impact. For the overall economy, a prolonged recession can be especially bad because of the effects on people’s lives – their job prospects, their lifetime earnings, the shift in family dynamics when one parent is unemployed becomes the personal catastrophe of unemployment, which when spread out across the economy, can become a national tragedy.

This is especially pernicious at a time when then the American economy is attempting to deleverage the debt from the housing crisis. With high unemployment prevalent in most markets, a lot of people are considering leaving jobs that are tenuous and re-entering the world of academia for Masters of PhD courses to become more eligible for an ever more competitive employment environment. But with tuition costs rising, this has translated to committing to a large amount of debt through student loans. In 2011, American student-loan debt surpassed credit card debt for the first time. More students are borrowing more money than ever before to buy a commodity that is often of dubious value in recessionary times. This combines to an especially vicious cycle, where the