UK policy debate has recently focused on the role of young people's aspirations and attitudes in raising educational attainment. We use the youth component of the British Household Panel Survey to examine how educational attitudes and aspirations among 11- to 15-year-olds vary with the local unemployment rate. We find that children who have highly educated parents with positive educational attitudes react more positively to low labour demand than those from less educated families with negative educational attitudes. This reduces social mobility and increases persistence in educational inequality for a cohort growing up in a recession.
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