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Unemployment and Subsequent Earnings: Estimating Scarring among British Men 1984-94

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  • Gregory, Mary
  • Jukes, Robert

Abstract

This paper estimates the impact of unemployment on earnings following re-employment for a large and representative sample of British men, 1984-94. Unemployment incidence is found to have only a temporary effect, an average earnings setback of 10% on initial re-engagement largely eroding over two years. The effect of unemployment duration, by contrast, is permanent, a one-year spell adding a further penalty of 10 percentage points. These wage penalties are least for young men and the low paid--those most at risk of unemployment--and greatest for prime age and highly paid men.

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  • Gregory, Mary & Jukes, Robert, 2001. "Unemployment and Subsequent Earnings: Estimating Scarring among British Men 1984-94," Economic Journal, Royal Economic Society, vol. 111(475), pages 607-625, November.
  • Handle: RePEc:ecj:econjl:v:111:y:2001:i:475:p:f607-25
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