'Creative Destruction'
'Creative Destruction'

Where Americans suffer widespread job loss, fewer people go to college.

So says a recent study from Duke University that linked local job loss with lower college attendance rates, worse mental health among adolescents, and increased inequality overall.

When traditional industries make way for more efficient, more technologically advanced industries, a process called “creative destruction”, economists have traditionally thought that young people would shift their education goals, the study said.

Think switching from horses-drawn carriages to cars.

Young people will “shift and ... invest further in education because they’re going to see the path to stable, middle-class lifestyle is now in white-collar work,” said Elizabeth Ananat, one of the study’s authors.

But Ananat, an associate professor of public policy studies and economics at Duke University, called this traditional theory of everyone shifting into the new industries an “optimistic notion.”

“The big takeaway from our study is that these job losses increase inequality in education because the high-income kids are going to go no matter what,” she said.

“It’s the low-income kids who are most strongly affected by these job losses.”

Job loss trickles down emotionally, as well.  The Duke study found that beyond not being able to afford tuition, job loss can cause mental and emotional stress among youth.  Likewise, it can cause poor academic performance, which sets education downward.

The 2017 Global Youth Wellbeing Index, a survey of approximately 70 percent of the world’s youth across 30 different countries, reported similar conclusions.  It found, despite education being the category that consistently ranks highest in well-being, too few young people are getting the preparation they need to be successful in work and life.

The index also found that youth lack adequate mental healthcare. Half of young people feel their lives are too stressful and more than half said the way they feel gets in the way of jobs, school, and life.

“Support for mental health for youth and adults, we think, is critical because one of the strongest sets of findings is that, when there are job losses in communities, it is extremely distressing for people that live there, and not just those who have lost jobs,” said Ananat.

“Traditionally, when policymakers have worries about these kind of large job losses, they’ve mostly worried about how to address the needs of the workers who lost jobs themselves,” said Anna Gassman-Pines, another author.

And while workers need intervention and assistance, the impact is much broader.

"One way of thinking about it could be more of a place-based rather than person-based strategy,” said Gassman-Pines.  

The authors explained that person-based strategies often measure the person who lost their job, and look at retraining or extended unemployment and health insurance benefits. But a place-based strategy would be more holistic, treating the job loss as a problem affecting the wider place rather than people.

Ananat and Gassman-Pines say schools should shoulder more weight in helping their students.

“I think a lot of university health services tend to assume that families are a source of support for students who are having struggles,” said Ananat.

“For youth, the education itself is probably the best protection we have for weathering any changes in the economy.  It’s not a guarantee, but it’s one of the best forms of insurance we have so it’s a matter of how do we support the students so that they stay in and get through.”

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