Early Labor Market Experiences of Youth and Subsequent Wages

. High youth unemployment continues to be a major concern to policymakers in the United States. In view of the many studies that have documented a perpetuation of the relatively high jobless rates for youth in the postwar period whether disaggregated by age, sex, or race, the debate on the youth employment‐unemployment problem has begun to focus more recently on its socioeconomic consequences. One of the overriding concerns is that early labor market unemployment experiences might carry over into later labor force performance. The cumulative effects of prolonged periods of unemployment and intermittent unemployment (i.e., duration and spells of unemployment) on the subsequent wages of a cohort of young men are examined. Spells of unemployment experienced early in the labor market careers of the cohort tended to have an increasing effect on their later wages, while spells occurring later and the duration of unemployment then serve to lower their subsequent wages.