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Heterogeneous scars in later life: The economic impact of early labour market opportunities

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  • Crudu, Petru

Abstract

I analyse the heterogeneous effects of labour market opportunities at education completion on end-of-career outcomes. I use data on European individuals who completed education between 1963 and 1982, observing their outcomes beyond age 50. Using standard econometric models and machine learning, I find that poor initial opportunities have lasting effects. Economic downturns have a non-linear impact: missing good opportunities harms more than avoiding bad ones. Effects are stronger for less-educated and low socioeconomic individuals. Women face permanent reductions in labour market participation. I examine explanatory channels over the lifecycle, showing how initial opportunities shape human capital trajectories.

Suggested Citation

  • Crudu, Petru, 2026. "Heterogeneous scars in later life: The economic impact of early labour market opportunities," Labour Economics, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:labeco:v:99:y:2026:i:c:s0927537126000151
    DOI: 10.1016/j.labeco.2026.102864
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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