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Scars of Youth Non-employment and Labour Market Conditions

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  • Giulia Martina Tanzi

    (Bank of Italy, Milano Branch, Economic Research Unit)

Abstract

In this paper I analyse whether non-employment periods at the initial stage of the work career may increase the propensity to experience non-employment in subsequent years too, using data on young individuals in Italy. The role of labour market conditions in moderating these scarring effects is investigated, exploiting the regional differences across the country. The results provide evidence of negative effects induced by early non-employment. Moreover, the negative repercussions of early non-employment are smaller (higher) in regions with higher (lower) unemployment rates. This evidence can be interpreted using the signaling theory.

Suggested Citation

  • Giulia Martina Tanzi, 2023. "Scars of Youth Non-employment and Labour Market Conditions," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 475-499, July.
    • Handle: RePEc:spr:italej:v:9:y:2023:i:2:d:10.1007_s40797-022-00191-6
    DOI: 10.1007/s40797-022-00191-6
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    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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