How did early-career cohorts fare during the Great Depression? This question is important not only because of the significance of the Great Depression to American history, and because the particular cohorts of interest are a generation whose life-course is consequential to the evolution of the 20th century economy. Rather, it is also important because young workers can be especially vulnerable during recessions, with harm to their careers being especially costly, and because workers at different career stages have very different scope for adjusting to labor market shocks.

To examine this question, we use large-scale longitudinal data generated from full-count historical Census linkage to estimate the effects of the Great Depression on labor market outcomes among cohorts entering the labor force around the time of the shock. Specifically, we compare Depression (1930s) and placebo (1920s) groups across counties experiencing more/less severe contractions, and across career-stage groups more/less at risk of labor market entry during the Depression’s trough. We also investigate the mechanisms behind these results, with a focus on how the Great Depression changed these cohorts’ economic landscape, how policy shaped the choices of and opportunities available to these cohorts, and how our cohorts navigated their new environment through adaptive responses.

We find that among early-career cohorts at the time of the shock, the Great Depression accelerated pre-existing economic and demographic trends, such as urbanization, the decline of farming, and the decline of the South. By and large, we find that all early-career entrants in more severely impacted counties did the same or better than their less impacted counterparts, a fact that appears driven primarily by these cohorts either leaving or being forced out of occupations with the poorest prospects. We also find that the beneficial impact of early-career exposure to the Great Depression is largest for the very youngest groups—and especially, those from better-off families—who had the greatest scope for anticipating and adapting to crisis conditions.