In the latest episode of Talking Economics Emerging Scholars, we speak with Margarita Pavlova, a CERGE-EI PhD candidate and an applied microeconomist specializing in labor and gender economics. Margarita studies how macroeconomic conditions, labor market policies, and institutional settings shape labor market outcomes over time.
Her research focuses on questions that are both timely and deeply relevant: How do economic downturns affect young people at the start of their careers? Do these effects persist over time? And do men and women respond differently to economic uncertainty?
Graduating into a recession — and why the story is more complicated than we think
The heart of the conversation centers on Margarita’s job market paper, “Graduates in a Cycle: The Effects of Business Cycle Trajectories on Labor Market Outcomes of College Graduates.”
The topic of graduating during a recession has been widely studied. Existing research generally finds that entering the labor market in bad times leaves long-lasting “scarring effects” on wages, earnings, and employment prospects. But Margarita argues that this picture is incomplete.
Much of the literature looks only at economic conditions at the moment of graduation. Her research asks a broader question: what about the conditions at the time students enroll in college, and in the years immediately after graduation?
This matters because recessions also affect who decides to go to college in the first place. During bad times, more students may enroll because their outside options are weaker. That changes the composition of the graduating cohort. Margarita shows that some of the long-term negative effects previously attributed to bad labor market conditions at graduation may actually reflect these earlier selection effects.
Her findings suggest that the commonly cited scarring effect is not equally severe for everyone. Students who enroll during good times but graduate into a recession do face setbacks, especially in employment and full-time work, but many recover relatively quickly. In contrast, broader cohort-level effects are shaped in part by the fact that more marginal students enter college during downturns.
Looking beyond a single point in time
Another important contribution of the paper is its longer view of labor market conditions. Rather than treating unemployment at graduation as the only relevant factor, Margarita also considers the years that follow.
This is crucial because two people graduating under similar unemployment rates may face very different realities depending on what happens next. A graduate entering the labor market in 2007, for example, was soon hit by the global financial crisis. Someone graduating in another year with a similar unemployment rate might not experience the same prolonged difficulties.
By accounting for business cycle trajectories rather than just a single year, Margarita offers a more nuanced understanding of how early-career outcomes are shaped.
Gender differences: a companion project on women
In addition to her main paper, Margarita is also working on a companion study focused on women. This research highlights an important difference: labor force participation among male college graduates in the United States is extremely high, around 97 percent, while for women, the story is more complex.
Her preliminary findings suggest that women who enroll in college during bad economic times tend to put more effort into studying, measured in hours spent on educational activities. After graduation, they are also more likely to remain attached to the labor market. Compared with women who started college in better times, they tend to postpone marriage and having their first child.
In the episode, Margarita reflects on a possible explanation: economic uncertainty may make the need for financial independence feel more urgent. When young women see difficult conditions around them, whether in their families or among peers, they may respond by investing more heavily in education and work.
The result is a fascinating picture of how macroeconomic conditions can shape not only careers but also life choices.
Product market competition and the gender pay gap
The episode also explores another strand of Margarita’s research: the relationship between product market competition and the gender pay gap.
Building on Gary Becker’s theory of discrimination, her work examines whether reduced competition can worsen gender inequality. While many studies show that rising competition can narrow pay gaps, evidence on the reverse process has been scarce.
Margarita studies a natural experiment from Russia in 2014, when an embargo on food imports from the European Union and the United States sharply reduced competition in affected industries. Her findings suggest that the gender pay gap did increase, largely because highly educated women left the industries most exposed to the embargo.
This research is especially relevant today, as globalization weakens and trade barriers rise in many parts of the world.
Why this research matters
Margarita Pavlova’s work shows how closely linked macroeconomic conditions and individual lives really are. Recessions and economic shocks do not only affect growth rates or unemployment figures. They also shape educational decisions, career trajectories, family formation, and inequality.
For policymakers, her findings are a reminder that the effects of downturns extend well beyond the moment of crisis. For young people, they show how timing and economic context can matter in ways that are not always immediately visible. And for researchers, her work demonstrates the value of looking beyond simple explanations to understand how economic forces unfold over time.
Listen to the full episode
In this episode of Talking Economics Emerging Scholars, Margarita Pavlova discusses her path into economics, the experience of doing research at CERGE-EI and Yale, and the questions that drive her work in labor and gender economics. Available on Spotify, Apple Podcasts, or YouTube.
Margarita is an applied microeconomist specializing in labor and gender economics. Her research explores how macroeconomic conditions, labor market policies, and institutions shape labor market outcomes—especially the long-term effects of economic shocks, wage setting, and labor market inequality. In her job market paper, Margarita studies how business-cycle conditions at the time of labor market entry shape early-career trajectories and how these effects evolve. In spring 2025, she was a visiting scholar at the Department of Economics at Yale University.
