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Youth Labor Markets in the U.S.: Shopping Around vs. Staying Put

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  • David Neumark

Abstract

The need for school-to-work programs or other means of increasing early job market stability is predicated on the view that the chaotic' nature of youth labor markets in the U.S. is costly because workers drift from one job to another without developing skills, behavior, or other characteristics that in turn lead to higher adult earnings. However, there is also ample evidence that workers receive positive returns to job shopping. This paper asks whether youths in unstable or dead-end jobs early in their careers suffer adverse labor market consequences as adults. In particular, it accounts for the endogenous determination of early job stability as a response to job match quality which may also influence adult wages using labor market conditions in the early years in the labor market as instrumental variables for the job stability experienced during those years. The instrumental variables estimates generally point to substantial positive effects of early job stability on adult wages.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6581.

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Date of creation: May 1998
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Publication status: published as Neumark, David. "Youth Labor Markets In The United States: Shopping Around Vs. Staying Put," Review of Economics and Statistics, 2002, v84(3,Aug), 462-482.
Handle: RePEc:nbr:nberwo:6581

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  1. Rosella Gardecki & David Neumark, 1998. "Order from chaos? The effects of early labor market experiences on adult labor market outcomes," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(2), pages 299-322, January.
  2. David G. Blanchflower & Andrew J. Oswald, 1989. "The Wage Curve," NBER Working Papers 3181, National Bureau of Economic Research, Inc.
    • Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
  3. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-97, June.
  4. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  5. Audrey Light & Kathleen McGarry, 1998. "Job Change Patterns And The Wages Of Young Men," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 276-286, May.
  6. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-95, October.
  7. Ross Miller & Masanori Hashimoto, 1997. "How Do Training And Early Labor Market Experience Affect The Economic Well-Being Of Youths?," Working Papers 009, Ohio State University, Department of Economics.
  8. Topel, Robert H & Ward, Michael P, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 439-79, May.
  9. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-88, August.
  10. Joseph Altonji & R. Shakotko, 1985. "Do Wages Rise with Job Seniority?," Working Papers 567, Princeton University, Department of Economics, Industrial Relations Section..
  11. K. Newey, Whitney, 1985. "Generalized method of moments specification testing," Journal of Econometrics, Elsevier, vol. 29(3), pages 229-256, September.
  12. David T. Ellwood, 1982. "Teenage Unemployment: Permanent Scars or Temporary Blemishes?," NBER Chapters, in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 349-390 National Bureau of Economic Research, Inc.
  13. Timothy J. Bartik, . "The Distributional Effects of Local Labor Demand and Industrial Mix: Estimates Using Individual Panel Data," Upjohn Working Papers and Journal Articles tjb1996, W.E. Upjohn Institute for Employment Research.
  14. James Heckman, 1993. "Assessing Clinton's Program on Job Training, Workfare, and Education in the Workplace," NBER Working Papers 4428, National Bureau of Economic Research, Inc.
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Cited by:
  1. Raaum , Oddbjørn & Røed, Knut, 2003. "Do Business Cycle Conditions at the Time of Labour Market Entry Affect Future Unemployment?," Memorandum 12/2002, Oslo University, Department of Economics.
  2. Stefan Bender & Till von Wachter, 2006. "In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers," American Economic Review, American Economic Association, vol. 96(5), pages 1679-1705, December.
  3. Guerrazzi, Marco, 2014. "Workforce ageing and the training propensity of Italian firms: cross-sectional evidence from the INDACO survey," MPRA Paper 56826, University Library of Munich, Germany.
  4. Harry J. Holzer & Robert J. LaLonde, 1999. "Job Change and Job Stability Among Less-Skilled Young Workers," JCPR Working Papers 80, Northwestern University/University of Chicago Joint Center for Poverty Research.
  5. Eric French & Bhashkar Mazumder & Christopher Taber, 2005. "The changing pattern of wage growth for low skilled workers," Working Paper Series WP-05-24, Federal Reserve Bank of Chicago.
  6. Fernando Coloma & Bernardita Vial, 2003. "Desempleo e Inactividad Juvenil en Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(119), pages 149-171.
  7. 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.
  8. David Neumark & Donna Rothstein, 2003. "School-to-Career Programs and Transitions to Employment and Higher Education," NBER Working Papers 10060, National Bureau of Economic Research, Inc.
  9. Burgess, Simon & Propper, Carol & Rees, Hedley & Shearer, Arran, 2003. "The class of 1981: the effects of early career unemployment on subsequent unemployment experiences," Labour Economics, Elsevier, vol. 10(3), pages 291-309, June.
  10. Tricia Lynn Gladden & Christopher R. Taber, 1999. "Wage Progression Among Less Skilled Workers," JCPR Working Papers 72, Northwestern University/University of Chicago Joint Center for Poverty Research.
  11. Simon Burgess & Carol Propper & Hedley Rees & Arran Shearer, 1999. "The Class of '81: The effects of early-career unemployment on subsequent unemployment experiences," CASE Papers 032, Centre for Analysis of Social Exclusion, LSE.

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