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Scars of youth non-employment and labour market conditions

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  • Giulia Martina Tanzi

    (Bank of Italy)

Abstract

In this paper I analyse whether non-employment periods at the initial stages of an individual’s career may increase workers’ propensity to experience non-employment also in subsequent years. The study is based on data on young individuals in Italy. The paper uses an instrumental variables approach to separate the effect of early non-employment from any residual unobserved heterogeneity. The results provide strong evidence of negative effects induced by early non-employment, but the size of these effects depends on individual and regional labour market characteristics. The negative repercussions of early non-employment are smaller during economic downturns or in regions with high unemployment rates.

Suggested Citation

  • 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.
    • Handle: RePEc:bdi:wptemi:td_1312_20
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    References listed on IDEAS

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    More about this item

    Keywords

    non-employment; labor market conditions; instrumental variables;
    All these keywords.

    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
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models

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