The Effects of School-to-Work Transition Pathways on Economic Outcomes through the Great Recession

Whereas the term “school-to-work transition” (STW) implies a clear, discrete event, this increasingly prolonged transitional period is not always unidirectional and typically includes involvements in both school and work. Destandardization in the STW transition makes it difficult to assess the extent to which young people today “flounder” during this period. Using longitudinal data from the US Youth Development Study and hierarchical latent class analysis, this paper examines the interplay of educational and career attainment and its longer-term economic consequences. Four STW pathways were observed from age 18 to age 30: two groups that attain careers through postsecondary education (via Bachelor’s or Associates/Vocational degrees) and two floundering groups that do not (those with some college and those with no postsecondary experience).

Regression models demonstrate the negative effects of floundering pathways on economic outcomes and the heightened difficulties of those pursuing these pathways during a recession. While the High School Flounderers were consistently the worst off, the Some College Flounderers (SCF) also experienced relatively poor economic outcomes. Both pre-recession (2005) and in 2009, respondents in the SCF pathway were less likely to have a savings account and own a home, and had more financial problems and lower job satisfaction than those who moved into the labor force with Bachelors’ degrees. Even starker were their circumstances in turbulent economic times, with the SCF pathway now more likely to be unemployed, receive financial help from parents, and to have recently lost a job. The fact that most differences between the Associates/Vocational into Career group and the Bachelors into Career group were non-significant, despite their unequal educational attainments, suggests that the pathway from an Associates or Vocational degree to a career is a viable alternative. We discuss implications of these findings both for the U.S. context, as well as for transition dynamics in other countries.