Last week we looked at the medical sector. Since then we’ve found another industry that’s even more recession proof - education.

Like medical care, it’s in great demand. Parents want it for their kids, and students generally know it sets them up for a lifetime of higher earnings. Plus, as opposed to medical care, education is nearly free. The supply is limited only by government’s ability to pay (which is usually influenced by teachers unions and voters). And you pay school taxes regardless of whether you have school-age children.

That doesn’t mean all education spending is immune. Both education and health care will soften, but probably not for another year.

Education Employment Growth Rates Year over Year:

Source: Bureau of Labor Statistics

Education employment (and by extension spending) rarely declines. During the 2001 recession, it didn’t blink. It wasn’t until mid-2002, a full year after the recession ended, that government and private higher education employment declined significantly. That suggests the next decline won’t come until 2009, at the earliest.

The ratio of all children 5-17 and all education workers for the population they serve.

Source: Bureau of Labor Statistics, and Bureau of the Census

Long term the trend is clear. The number of total education employees (both government and private) is growing, and it’s growing faster than the number of school-age children. In 1990, there was one employee per 5.6 children ages 5-19. Now the ratio is 4.6 to one. In other words, if every single education worker were a teacher, the average classroom would have only 4.6 kids.

Of the three categories, higher education appears to be the best growth sector. It’s added more employees than the other two since mid-2001. Private education before high school appears to be the weakest. That includes private tutors, whose employment prospects dim as parental income declines. And private schools are hurt by recessions. Catholic schools I’ve surveyed say parents often move children to public schools during downturns.

Still, this sector is one of the best places to weather a recession.

In our weekly “Ask the Economist” feature, our resident Economist, Mike Donnelly, will be tackling your questions about the economy. If you’ve got a question — and no topic is too big or small — you’d like him to field, e-mail us at economist@pbp.com or leave your queries in the comments section.

Tags: Education, Private schools, Recession proof