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The Lost Generation: Effects of Youth Labor Market Opportunities on Long-Term Labor Market Outcomes

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  • Haaland, Venke Furre

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    (UiS)

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    Abstract

    The labor market conditions that youth face at the typical age of labor market entry can impact their success in the labor market. Utilizing registry data for all Norwegian males born in 1961–1975, I demonstrate that local unemployment rates at the typical age of graduation from compulsory school (age 16) and high-school (age 19) have persistent, negative effects on males’ earnings, employment, and disability pension utilization when measured as late as age 35. With data on every male IQ, I am able to study how labor market conditions at age of graduation have varying effects for low- and high-ability males. As expected, low-ability males are particularly vulnerable to business cycles at the time of labor market entry. For low-ability youth, a 1 percentage point increase in the local unemployment rate at age 16 reduces earnings at age 35 by about 4 percent and increases the likelihood of being on disability pension by about 20 percent.

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    Bibliographic Info

    Paper provided by University of Stavanger in its series UiS Working Papers in Economics and Finance with number 2013/8.

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    Length: 48 pages
    Date of creation: 10 Dec 2013
    Date of revision:
    Handle: RePEc:hhs:stavef:2013_008

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    Postal: University of Stavanger, NO-4036 Stavanger, Norway
    Web page: http://www.uis.no/research/economics_and_finance
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