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Do Business Cycles Have Long-Term Impact for Particular Cohorts?

Author

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  • Torben M. Andersen

    (Department of Economics and Business, Aarhus University)

  • Jonas Maibom

    (Department of Economics and Business, Aarhus University)

  • Michael Svarer
  • Allan Sørensen

    (Department of Economics and Business, Aarhus University)

Abstract

Will the current employment crisis produce lost generations with permanently lower labour market attachment? Taking an explicit cohort perspective and based on Danish data we do not find strong persistence in employment rates at the cohort level. Younger workers tend to be more exposed to business cycle fluctuations than older workers, but importantly they recover more quickly from such set-backs than older workers for whom persistence is stronger. Moreover, no cohorts have been disproportionately affected by exposure to a sequence of adverse shocks. An explicit account of overlapping cohorts is shown to affect assessments of persistence in aggregate employment rates.

Suggested Citation

  • Torben M. Andersen & Jonas Maibom & Michael Svarer & Allan Sørensen, 2013. "Do Business Cycles Have Long-Term Impact for Particular Cohorts?," Economics Working Papers 2013-26, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2013-26
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    Cited by:

    1. Maibom, Jonas & Vejlin, Rune Majlund, 2021. "Passthrough of Firm Performance to Income and Employment Stability," IZA Discussion Papers 14131, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Persistence; lost generations; employment;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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