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The scars of youth : effects of early-career unemployment on future unemployment experience

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Author Info

  • Schmillen, Achim

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Umkehrer, Matthias

    ()
    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

Abstract

"Does early-career unemployment cause future unemployment? We answer this question with German administrative matched employer-employee data that track more than 800,000 individuals over 24 years. Using a censored quantile instrumental variable estimator and instrumenting early-career unemployment with local labor market conditions at labor market entry and firm-specific labor demand shocks, we find significant and longlasting scarring effects. At the median, an additional day of unemployment during the first eight years on the labor market increases unemployment in the following 16 years by 0.96 days. Effects are even stronger in the right tail of the unemployment distribution. Likely due to unobserved heterogeneity in returns to search, they are also understated by non-IV estimates." (Author's abstract, IAB-Doku) ((en))

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Bibliographic Info

Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 201306.

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Length: 54 pages
Date of creation: 23 May 2013
Date of revision:
Handle: RePEc:iab:iabdpa:201306

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Keywords: Jugendarbeitslosigkeit - Auswirkungen; junge Erwachsene; Jugendliche; ältere Arbeitnehmer; mittleres Lebensalter; Arbeitslosigkeitsdauer - Determinanten;

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Citations

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Cited by:
  1. Umkehrer, Matthias, 2013. "Youth Employment Instability, True State Dependence and Adult Wage Inequality," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80014, Verein für Socialpolitik / German Economic Association.
  2. Eichhorst, Werner & Hinte, Holger & Rinne, Ulf, 2013. "Youth Unemployment in Europe: What to Do about It?," IZA Policy Papers 65, Institute for the Study of Labor (IZA).
  3. Cahuc, Pierre & Carcillo, Stéphane & Rinne, Ulf & Zimmermann, Klaus F., 2013. "Youth Unemployment in Old Europe: The Polar Cases of France and Germany," IZA Discussion Papers 7490, Institute for the Study of Labor (IZA).
  4. Eichhorst, Werner & Hinte, Holger & Rinne, Ulf, 2013. "Jugendarbeitslosigkeit in Europa: Status Quo und (keine?) Perspektiven," IZA Standpunkte 57, Institute for the Study of Labor (IZA).

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