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The labour market impacts of leaving education when unemployment is high: evidence from Britain

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  • Taylor, Mark P.
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    Abstract

    We estimate the effects of initial labour market entry conditions on a range of subsequent job outcomes for men and women who entered the British labour market between 1991 and 2009, using data from the British Household Panel Survey and its successor Understanding Society. We find that the unemployment rate on leaving full-time education has large impacts on initial labour market outcomes including status, wages and employment stability, which persist over the subsequent ten years. These effects are more pronounced for men than women and indicate that young people entering the labour market during the current period of economic stagnation will suffer a lasting scar as a consequence.

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    File URL: https://www.iser.essex.ac.uk/publications/working-papers/iser/2013-12.pdf
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    Bibliographic Info

    Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2013-12.

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    Date of creation: 12 Aug 2013
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    Publication status: published
    Handle: RePEc:ese:iserwp:2013-12

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    Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
    Phone: 44-1206-872957
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    Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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    1. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2006. "The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates," NBER Working Papers 12159, National Bureau of Economic Research, Inc.
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    4. Petrongolo, Barbara & San Segundo, Maria J., 2002. "Staying-on at school at 16: the impact of labor market conditions in Spain," Economics of Education Review, Elsevier, Elsevier, vol. 21(4), pages 353-365, August.
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    6. Patricia Rice, 1999. "The impact of local labour markets on investment in further education: Evidence from the England and Wales youth cohort studies," Journal of Population Economics, Springer, Springer, vol. 12(2), pages 287-312.
    7. Topel, Robert H & Ward, Michael P, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(2), pages 439-79, May.
    8. McVicar, Duncan & Rice, Patricia, 2001. "Participation in Further Eduction in England and Wales: An Analysis of Post-War Trends," Oxford Economic Papers, Oxford University Press, vol. 53(1), pages 47-66, January.
    9. Paul Oyer, 2006. "Initial Labor Market Conditions and Long-Term Outcomes for Economists," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 20(3), pages 143-160, Summer.
    10. Illoong Kwon & Eva Meyersson Milgrom & Seiwoon Hwang, 2010. "Cohort Effects in Promotions and Wages: Evidence from Sweden and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 45(3).
    11. Hilary Hoynes & Douglas L. Miller & Jessamyn Schaller, 2012. "Who Suffers during Recessions?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 26(3), pages 27-48, Summer.
    12. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(475), pages F626-53, November.
    13. Micklewright, John & Pearson, Mark & Smith, Stephen, 1990. "Unemployment and Early School Leaving," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 100(400), pages 163-69, Supplemen.
    14. Damon Clark, 2011. "Do Recessions Keep Students in School? The Impact of Youth Unemployment on Enrolment in Post‐compulsory Education in England," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 78(311), pages 523-545, 07.
    15. Sara Connolly & Mary Gregory, 2009. "The part-time pay penalty: earnings trajectories of British Women," Oxford Economic Papers, Oxford University Press, vol. 61(suppl_1), pages i76-i97, April.
    16. Paul Oyer, 2008. "The Making of an Investment Banker: Stock Market Shocks, Career Choice, and Lifetime Income," Journal of Finance, American Finance Association, American Finance Association, vol. 63(6), pages 2601-2628, December.
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    20. repec:ese:iserwp:2012-26 is not listed on IDEAS
    21. Meschi, Elena & Swaffield, Joanna K. & Vignoles, Anna, 2011. "The Relative Importance of Local Labour Market Conditions and Pupil Attainment on Post-Compulsory Schooling Decisions," IZA Discussion Papers 6143, Institute for the Study of Labor (IZA).
    22. Beatrice Brunner & Andreas Kuhn, 2010. "The impact of labor market entry conditions on initial job assignment, human capital accumulation, and wages," IEW - Working Papers 520, Institute for Empirical Research in Economics - University of Zurich.
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