IDEAS home Printed from https://ideas.repec.org/p/fer/dpaper/312.html
   My bibliography  Save this paper

Education and Unemployment: State Dependence in Unemployment Among Young People in the 1990s

Author

Listed:
  • Hämäläinen, Kari

Abstract

This study examines the labour market careers of young people who finished their studies or left compulsory schooling in 1988. The main issue of interest is the impact of past unemployment on current unemployment. The results strongly suggest a sizeable scarring effect of the incidence of unemployment on future labour market possibilities. The impact is estimated of being some 20 percentage points, on average, in terms of unemployment probability. When differentiated by the level of education, the results show that only university graduates were relatively immune to the damaging long-term effects of unemployment.

Suggested Citation

  • Hämäläinen, Kari, 2003. "Education and Unemployment: State Dependence in Unemployment Among Young People in the 1990s," Discussion Papers 312, VATT Institute for Economic Research.
    • Handle: RePEc:fer:dpaper:312
    as

    Download full text from publisher

    File URL: https://www.doria.fi/handle/10024/148291
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-380, October.
    2. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    3. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318, Elsevier.
    4. Pekkala, Sari & Tervo, Hannu, 2002. " Unemployment and Migration: Does Moving Help?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 621-639, December.
    5. Sattinger, Michael, 1998. "Statistical Discrimination with Employment Criteria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 205-237, February.
    6. David Blanchflower & Richard Freeman, 1996. "Growing Into Work," CEP Discussion Papers dp0296, Centre for Economic Performance, LSE.
    7. Sari Pekkala & Hannu Tervo, 2002. "Unemployment and Migration: Does Moving Help?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 621-639, December.
    8. James J. Heckman & Robert J. Willis, 1976. "Estimation of a Stochastic Model of Reproduction: An Econometric Approach," NBER Chapters, in: Household Production and Consumption, pages 99-146, National Bureau of Economic Research, Inc.
    9. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-764, May.
    10. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    11. Wiji Arulampalam & Alison L. Booth, 2000. "Union status of young men in Britain: a decade of change," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(3), pages 289-310.
    12. Christopher J. Ruhm, 1998. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 285-317.
    13. Olivier Jean Blanchard & Peter Diamond, 1994. "Ranking, Unemployment Duration, and Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 417-434.
    14. James W. Albrecht & Per-Anders Edin & Marianne Sundström & Susan B. Vroman, 1999. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 294-311.
    15. Eriksson, Stefan, 2002. "Imperfect information, wage formation, and the employability of the unemployed," Working Paper Series 2002:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    16. Mark B. Stewart, 2002. "The Inter-related Dynamics of Unemployment and Low Pay," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-4, International Conferences on Panel Data.
    17. Nestor E. Terleckyj, 1976. "Household Production and Consumption," NBER Books, National Bureau of Economic Research, Inc, number terl76-1, May.
    18. Kyyrä, Tomi, 1999. "Post-Unemployment Wages and Economic Incentives to Exit from Unemployment," Research Reports 56, VATT Institute for Economic Research.
    19. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 121-154, January.
    20. Asplund, Rita, 2000. "Unemployment among Finnish Manufacturing Workers. Who Gets Unemployed and from Where?," Discussion Papers 711, The Research Institute of the Finnish Economy.
    21. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    22. Waldfogel, Jane, 1998. "The Family Gap for Young Women in the United States and Britain: Can Maternity Leave Make a Difference?," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 505-545, July.
    23. James J. Heckman, 1981. "Heterogeneity and State Dependence," NBER Chapters, in: Studies in Labor Markets, pages 91-140, National Bureau of Economic Research, Inc.
    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. Biewen, Martin & Steffes, Susanne, 2010. "Unemployment persistence: Is there evidence for stigma effects?," Economics Letters, Elsevier, vol. 106(3), pages 188-190, March.

    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. Nisar Ahmad, 2014. "State Dependence in Unemployment," International Journal of Economics and Financial Issues, Econjournals, vol. 4(1), pages 93-106.
    2. Amélie Speiser, 2021. "Back to work: the effect of a long-term career interruption on subsequent wages in Switzerland," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 157(1), pages 1-14, December.
    3. Mark B. Stewart, 2002. "The Inter-related Dynamics of Unemployment and Low Pay," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-4, International Conferences on Panel Data.
    4. Mavromaras, Kostas & Polidano, Cain, 2011. "NILS Working paper no 165. Improving the employment rates of people with disabilities through vocational education," NILS Working Papers 26068, National Institute of Labour Studies.
    5. Mark B. Stewart, 2007. "The interrelated dynamics of unemployment and low-wage employment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 511-531.
    6. Georgios Marios Chrysanthou, 2007. "Determinants of Trade Union Membership in Great Britain During 1991-2003," Discussion Papers 07/01, Department of Economics, University of York.
    7. Görlich, Dennis & De Grip, Andries, 2007. "Human capital depreciation during family-related career interruptions in male and female occupations," Kiel Working Papers 1379, Kiel Institute for the World Economy (IfW Kiel).
    8. Amynah Gangji & Robert Plasman, 2008. "Microeconomic analysis of unemployment persistence in Belgium," International Journal of Manpower, Emerald Group Publishing Limited, vol. 29(3), pages 280-298, June.
    9. Laisney, François & Pohlmeier, Winfried & Staat, Matthias, 1991. "Estimation of labour supply functions using panel data: a survey," ZEW Discussion Papers 91-05, ZEW - Leibniz Centre for European Economic Research.
    10. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, July.
    11. Giarda, Elena, 2013. "Persistency of financial distress amongst Italian households: Evidence from dynamic models for binary panel data," Journal of Banking & Finance, Elsevier, vol. 37(9), pages 3425-3434.
    12. Molina, José Alberto & Montuenga, Víctor M., 2008. "The Motherhood Wage Penalty in a Mediterranean Country: The Case of Spain," IZA Discussion Papers 3574, Institute of Labor Economics (IZA).
    13. Ken Clark & Nikolaos C. Kanellopoulos, 2009. "Low Pay Persistence in European Countries," SOEPpapers on Multidisciplinary Panel Data Research 207, DIW Berlin, The German Socio-Economic Panel (SOEP).
    14. Phimister, Euan, 2005. "Urban effects on participation and wages: Are there gender differences?," Journal of Urban Economics, Elsevier, vol. 58(3), pages 513-536, November.
    15. Manudeep Bhuller & Christian N. Brinch & Sebastian Königs, 2017. "Time Aggregation and State Dependence in Welfare Receipt," Economic Journal, Royal Economic Society, vol. 127(604), pages 1833-1873, September.
    16. Wiji Arulampalam & Mark B. Stewart, 2009. "Simplified Implementation of the Heckman Estimator of the Dynamic Probit Model and a Comparison with Alternative Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(5), pages 659-681, October.
    17. Schönberg, Uta & Ludsteck, Johannes, 2007. "Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap," IZA Discussion Papers 2699, Institute of Labor Economics (IZA).
    18. Cuesta, Maite Blázquez & Budría, Santiago, 2017. "Unemployment persistence: How important are non-cognitive skills?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 69(C), pages 29-37.
    19. Braga, Breno, 2018. "Earnings dynamics: The role of education throughout a worker’s career," Labour Economics, Elsevier, vol. 52(C), pages 83-97.
    20. Kari Hämäläinen & Aki Kangasharju & Sari Pekkala & Matti Sarvimäki, 2005. "Employment Assimilation of Immigrants - Evidence from Finland," ERSA conference papers ersa05p75, European Regional Science Association.

    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:fer:dpaper:312. 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: Anita Niskanen (email available below). General contact details of provider: https://edirc.repec.org/data/vatttfi.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.