IDEAS home Printed from https://ideas.repec.org/p/ese/iserwp/2013-12.html
   My bibliography  Save this paper

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

Author

Listed:
  • P. Taylor, Mark

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.

Suggested Citation

  • P. Taylor, Mark, 2013. "The labour market impacts of leaving education when unemployment is high: evidence from Britain," ISER Working Paper Series 2013-12, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2013-12
    as

    Download full text from publisher

    File URL: https://www.iser.essex.ac.uk/wp-content/uploads/files/working-papers/iser/2013-12.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    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.
    2. Sara Connolly & Mary Gregory, 2008. "Moving Down: Women's Part‐Time Work and Occupational Change in Britain 1991–2001," Economic Journal, Royal Economic Society, vol. 118(526), pages 52-76, February.
    3. Brunner, Beatrice & Kuhn, Andreas, 2010. "The Impact of Labor Market Entry Conditions on Initial Job Assignment, Human Capital Accumulation, and Wages," IZA Discussion Papers 5360, Institute of Labor Economics (IZA).
    4. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-229, April.
    5. 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 of Labor Economics (IZA).
    6. Boheim, Rene & Taylor, Mark P., 2002. "The search for success: do the unemployed find stable employment?," Labour Economics, Elsevier, vol. 9(6), pages 717-735, December.
    7. Ayako Kondo, 2015. "Differential effects of graduating during a recession across gender and race," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-24, December.
    8. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 237-261, April.
    9. Yuji Genda & Ayako Kondo & Souichi Ohta, 2010. "Long-Term Effects of a Recession at Labor Market Entry in Japan and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
    10. 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, vol. 21(4), pages 353-365, August.
    11. Micklewright, John & Pearson, Mark & Smith, Stephen, 1990. "Unemployment and Early School Leaving," Economic Journal, Royal Economic Society, vol. 100(400), pages 163-169, Supplemen.
    12. 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).
    13. Rampino, Tina & P. Taylor, Mark, 2012. "Educational aspirations and attitudes over the business cycle," ISER Working Paper Series 2012-26, Institute for Social and Economic Research.
    14. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 439-479.
    15. Hilary Hoynes & Douglas L. Miller & Jessamyn Schaller, 2012. "Who Suffers during Recessions?," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 27-48, Summer.
    16. 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.
    17. James Banks & Rowena Crawford & Thomas Crossley & Carl Emmerson, 2012. "The effect of the financial crisis on older households in England," IFS Working Papers W12/09, Institute for Fiscal Studies.
    18. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    19. Manning, Alan, 2000. "Pretty Vacant: Recruitment in Low-Wage Labour Markets," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(0), pages 747-770, Special I.
    20. Crawford, Rowena, 2013. "The effect of the financial crisis on the retirement plans of older workers in England," Economics Letters, Elsevier, vol. 121(2), pages 156-159.
    21. 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 76-97, April.
    22. 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;European Society for Population Economics, vol. 12(2), pages 287-312.
    23. Beatrice Brunner & Andreas Kuhn, 2010. "The Impact of Labor Market Entry Condition on Initial Job Assignment, Human Capital Accumulation, and Wages," NRN working papers 2010-15, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    24. 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.
    25. Paul Oyer, 2006. "Initial Labor Market Conditions and Long-Term Outcomes for Economists," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 143-160, Summer.
    26. Tumino, Alberto & P. Taylor, Mark, 2015. "The impact of local labour market conditions on school leaving decisions," ISER Working Paper Series 2015-14, Institute for Social and Economic Research.
    27. Paul Oyer, 2008. "The Making of an Investment Banker: Stock Market Shocks, Career Choice, and Lifetime Income," Journal of Finance, American Finance Association, vol. 63(6), pages 2601-2628, December.
    28. 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, vol. 78(311), pages 523-545, July.
    29. Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-1260, December.
    30. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages 626-653, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. International Labour Organization., 2015. "Global employment trends for youth 2015 : scaling up investments in decent jobs for youth," Global Employment Trends Reports 994891803402676, International Labour Office, Economic and Labour Market Analysis Department.
    2. Inés Berniell & Leonardo Gasparini & Mariana Marchionni & Mariana Viollaz, 2022. "Lucky Women in Unlucky Cohorts: Gender Differences in the Effects of Initial Labor Market Conditions in Latin America," CEDLAS, Working Papers 0294, CEDLAS, Universidad Nacional de La Plata.
    3. Till von Wachter, 2020. "The Persistent Effects of Initial Labor Market Conditions for Young Adults and Their Sources," Journal of Economic Perspectives, American Economic Association, vol. 34(4), pages 168-194, Fall.
    4. Cockx, Bart & Ghirelli, Corinna, 2016. "Scars of recessions in a rigid labor market," Labour Economics, Elsevier, vol. 41(C), pages 162-176.
    5. Jake Anders & Andy Dickerson & Paul Gregg & Lindsey Macmillan, 2020. "Unemployment: The Coming Storm, Who Gets Hit, Who Gets Hurt, and Policy Remedies," CEPEO Working Paper Series 20-12, UCL Centre for Education Policy and Equalising Opportunities, revised Jul 2020.
    6. Berniell, Inés & Gasparini, Leonardo & Marchionni, Mariana & Viollaz, Mariana, 2023. "Lucky women in unlucky cohorts," Journal of Development Economics, Elsevier, vol. 161(C).
    7. Jake Anders & Lindsey Macmillan, 2020. "The unequal scarring effects of a recession on young people's life chances," CEPEO Briefing Note Series 6, UCL Centre for Education Policy and Equalising Opportunities, revised Jun 2020.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haaland, Venke Furre, 2013. "The Lost Generation: Effects of Youth Labor Market Opportunities on Long-Term Labor Market Outcomes," UiS Working Papers in Economics and Finance 2013/8, University of Stavanger.
    2. Beatrice Brunner & Andreas Kuhn, 2014. "The impact of labor market entry conditions on initial job assignment and wages," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 705-738, July.
    3. Venke Furre Haaland, 2016. "The lost generation: Effects of youth labor market opportunities on long-term labor market outcomes," Discussion Papers 835, Statistics Norway, Research Department.
    4. Daiji Kawaguchi & Tetsushi Murao, 2014. "Labor‐Market Institutions and Long‐Term Effects of Youth Unemployment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(S2), pages 95-116, October.
    5. Cockx, Bart & Ghirelli, Corinna, 2016. "Scars of recessions in a rigid labor market," Labour Economics, Elsevier, vol. 41(C), pages 162-176.
    6. Beartice Brunner & Andreas Kuhn, 2009. "To Shape the Future: How Labor Market Entry Conditions Affect Individuals’s Long-Run Wage Profiles," NRN working papers 2009-29, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    7. Hamaaki, Junya & Hori, Masahiro & Maeda, Saeko & Murata, Keiko, 2013. "How does the first job matter for an individual’s career life in Japan?," Journal of the Japanese and International Economies, Elsevier, vol. 29(C), pages 154-169.
    8. Brunner, Beatrice & Kuhn, Andreas, 2009. "To Shape the Future: How Labor Market Entry Conditions Affect Individuals' Long-Run Wage Profiles," IZA Discussion Papers 4601, Institute of Labor Economics (IZA).
    9. Jaime Arellano-Bover, 2024. "Career Consequences of Firm Heterogeneity for Young Workers: First Job and Firm Size," Journal of Labor Economics, University of Chicago Press, vol. 42(2), pages 549-589.
    10. Beatrice Brunner & Andreas Kuhn, 2010. "The Impact of Labor Market Entry Condition on Initial Job Assignment, Human Capital Accumulation, and Wages," NRN working papers 2010-15, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    11. Rampino, Tina & P. Taylor, Mark, 2012. "Educational aspirations and attitudes over the business cycle," ISER Working Paper Series 2012-26, Institute for Social and Economic Research.
    12. Beatrice Brunner & Andreas Kuhn, 2009. "To shape the future: How labor market entry conditions affect individuals' long-run wage profiles," IEW - Working Papers 457, Institute for Empirical Research in Economics - University of Zurich.
    13. Liu, Kai & Salvanes, Kjell G. & Sørensen, Erik Ø., 2016. "Good skills in bad times: Cyclical skill mismatch and the long-term effects of graduating in a recession," European Economic Review, Elsevier, vol. 84(C), pages 3-17.
    14. Cutler, David M. & Huang, Wei & Lleras-Muney, Adriana, 2015. "When does education matter? The protective effect of education for cohorts graduating in bad times," Social Science & Medicine, Elsevier, vol. 127(C), pages 63-73.
    15. Johanna Catherine Maclean & Reginald Covington & Asia Sikora Kessler, 2016. "Labor Market Conditions At School-Leaving: Long-Run Effects On Marriage And Fertility," Contemporary Economic Policy, Western Economic Association International, vol. 34(1), pages 63-88, January.
    16. Yaa Akosa Antwi & Johanna Catherine Maclean, 2017. "State Health Insurance Mandates and Labor Market Outcomes: New Evidence on Old Questions," NBER Working Papers 23203, National Bureau of Economic Research, Inc.
    17. Del Bono, Emilia & Morando, Greta, 2021. "For Some, Luck Matters More: The Impact of the Great Recession on the Early Careers of Graduates from Different Socio-Economic Backgrounds," IZA Discussion Papers 14540, Institute of Labor Economics (IZA).
    18. Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
    19. Berge, Wiljan van den, 2018. "Bad start, bad match? The early career effects of graduating in a recession for vocational and academic graduates," Labour Economics, Elsevier, vol. 53(C), pages 75-96.
    20. Alberto Tumino, 2013. "The effect of local labour market conditions on educational choices: a cross country comparison," ImPRovE Working Papers 13/06, Herman Deleeck Centre for Social Policy, University of Antwerp.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ese:iserwp:2013-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jonathan Nears (email available below). General contact details of provider: https://edirc.repec.org/data/rcessuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.