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A scarred generation? French evidence on young people entering into a tough labour market

  • M. GAINI

    (Crest-Insee)

  • A. LEDUC

    (Insee)

  • A. VICARD

    (Insee)

Registered author(s):

    The late 2000s recession has hit youth very hard, lowering the employment and wage prospects of the entrants into the labour market. In this paper, we address the question of the persistence of these adverse shocks faced by young people who enter into the labour market during an economic downturn, focusing on the French case. Using the French Labour Force Surveys for the cohorts entering the labour market between 1982 and 2009 (which includes more than two entire business cycles), we find no long term effect on wage or employment of having entered the labour market during an economic crisis. "Unlucky" young people completing their studies during a recession have lower employment rates, are more often part-time and temporary workers, but catch-up with "lucky" one within 3 years. This fast catch-up contrasts with results for other countries. Potential explanations for those differences are twofold: first, in France a large share of young entrants are paid at the minimum wage and, second, young people unemployment is high in France, so that unemployment at entry on the labour market may be less often used as a screening device by employers.

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    File URL: http://www.insee.fr/en/publications-et-services/docs_doc_travail/G2012-05.pdf
    File Function: Document de travail de la DESE numéro G2012-05
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    Paper provided by Institut National de la Statistique et des Etudes Economiques, DESE in its series Documents de Travail de la DESE - Working Papers of the DESE with number g2012-05.

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    Date of creation: 2012
    Date of revision:
    Handle: RePEc:crs:wpdeee:g2012-05
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    1. Stefan Eriksson & Dan-Olof Rooth, 2014. "Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment," American Economic Review, American Economic Association, vol. 104(3), pages 1014-39, March.
    2. Øivind Anti Nilsen & Katrine Holm Reiso, 2011. "Scarring Effects of Unemployment," CESifo Working Paper Series 3675, CESifo Group Munich.
    3. Oddbjørn Raaum & Knut Røed, 2006. "Do Business Cycle Conditions at the Time of Labor Market Entry Affect Future Employment Prospects?," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 193-210, May.
    4. Illoong Kwon & Eva Meyersson Milgrom & Seiwoon Hwang, 2010. "Cohort Effects in Promotions and Wages: Evidence from Sweden and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 45(3).
    5. Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
    6. Yuji Genda & Ayako Kondo & Souichi Ohta, 2010. "Long-Term Effects of a Recession at Labor Market Entry in Japan and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
    7. Sophie Ponthieux, 1997. "Débuter dans la vie active au milieu des années quatre-vingt-dix : des conditions qui se dégradent," Économie et Statistique, Programme National Persée, vol. 304(1), pages 37-51.
    8. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages F626-53, November.
    9. Biewen, Martin & Steffes, Susanne, 2008. "Unemployment Persistence: Is There Evidence for Stigma Effects?," ZEW Discussion Papers 08-057, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. Nordström Skans, Oskar, 2011. "Scarring Effects of the First Labor Market Experience," IZA Discussion Papers 5565, Institute for the Study of Labor (IZA).
    11. Gregg, Paul & Tominey, Emma, 2005. "The wage scar from male youth unemployment," Labour Economics, Elsevier, vol. 12(4), pages 487-509, August.
    12. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
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