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Unemployment scarring in high unemployment regions

Author

Listed:
  • Claudio Lupi

    (ISAE - Institute for Studies and Economic Analyses)

  • Patrizia Ordine

    (University of Calabria, Dept. of Economics and Statistics)

Abstract

This paper investigates the effect of individual unemployment experiences on re-employment wages. The empirical analysis is carried out on a panel of Italian individuals. The main result is that while in the northern regions the effect is similar to the one estimated for the UK, in the southern area of the country the impact is not significant. We link this result to the particular socio-economic environment in which the unemployment spells are experienced. We argue that this might be due to the fact that in a high unemployment environment individual unemployment experiences are perceived as "normal" and do not necessarily signal poor quality of the worker. This might have effects in inducing the hysteresis of unemployment, and reducing the downward pressure of unemployment on wages at the macro level.

Suggested Citation

  • Claudio Lupi & Patrizia Ordine, 2002. "Unemployment scarring in high unemployment regions," Economics Bulletin, AccessEcon, vol. 10(2), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-02j30005
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    Citations

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    Cited by:

    1. Nikica Mojsoska-Blazevski & Marjan Petreski & Marjan I Bojadziev, 2017. "Youth survival in the labour market: Employment scarring in three transition economies," The Economic and Labour Relations Review, , vol. 28(2), pages 312-331, June.
    2. Filomena, Mattia & Giorgetti, Isabella & Picchio, Matteo, 2022. "Off to a Bad Start: Youth Nonemployment and Labor Market Outcomes Later in Life," IZA Discussion Papers 15366, Institute of Labor Economics (IZA).
    3. Petri Böckerman, 2004. "Perception of Job Instability in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 67(3), pages 283-314, July.
    4. Marjan Petreski & Nikica Mojsoska-Blazevski & Marcelo Bergolo, 2017. "Labor-Market Scars When Youth Unemployment is Extremely High: Evidence from Macedonia," Eastern European Economics, Taylor & Francis Journals, vol. 55(2), pages 168-196, March.
    5. Luigi Aldieri, 2009. "The Effects of Unemployment Experiences on Subsequent Wages in Italy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 52(2), pages 109-119.
    6. Giulia Martina Tanzi, 2020. "Scars of youth non-employment and labour market conditions," Temi di discussione (Economic working papers) 1312, Bank of Italy, Economic Research and International Relations Area.
    7. Sara Ayllón & Javier Valbuena & Alexander Plum, 2022. "Youth Unemployment and Stigmatization Over the Business Cycle in Europe," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(1), pages 103-129, February.
    8. Luis Beccaria & Roxana Maurizio & Martin Trombetta & Gustavo Vázquez, 2016. "Una evaluación del efecto scarring en Argentina," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 77, August.
    9. Fares, Jean & Tiongson, Erwin R., 2007. "Youth unemployment, labor market transitions, and scarring : evidence from Bosnia and Herzegovina, 2001-04," Policy Research Working Paper Series 4183, The World Bank.
    10. Gartell, Marie, 2009. "Unemployment and subsequent earnings for Swedish college graduates: a study of scarring effects," Working Paper Series 2009:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    11. Mattia Filomena, 2021. "Unemployment Scarring Effects: A Symposium On Empirical Literature," Working Papers 453, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    More about this item

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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