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Education and Unemployment: State Dependence in Unemployment Among Young People in the 1990s

  • Kari Hämäläinen
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    This study examines the labour market careers of young people who finished their studies or left compulsory schooling in 1988. The main issue of interest is the impact of past unemployment on current unemployment. The results strongly suggest a sizeable scarring effect of the incidence of unemployment on future labour market possibilities. The impact is estimated of being some 20 percentage points, on average, in terms of unemployment probability. When differentiated by the level of education, the results show that only university graduates were relatively immune to the damaging long-term effects of unemployment.

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    Paper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 312.

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    Date of creation: 21 Aug 2003
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    Handle: RePEc:fer:dpaper:312
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    1. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    2. Albrecht, J & Edin, P-A & Sundstrom, M & Vroman, S-B, 1996. "Career Interruptions and Subsequent Earning : A Reexamination Using Swedish Data," Papers 1996-23, Uppsala - Working Paper Series.
    3. Waldfogel, Jane, 1998. "The Family Gap for Young Women in the United States and Britain: Can Maternity Leave Make a Difference?," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 505-45, July.
    4. Tomi Kyyrä, 1999. "Post-Unemployment Wages and Economic Incentives to Exit from Unemployment," Research Reports 56, Government Institute for Economic Research Finland (VATT).
    5. Sari Pekkala, 2002. "Unemployment and Migration: Does Moving Help?," Discussion Papers 281, Government Institute for Economic Research Finland (VATT).
    6. Olivier Jean Blanchard & Peter Diamond, 1990. "Ranking, Unemployment Duration, and Wages," NBER Working Papers 3387, National Bureau of Economic Research, Inc.
    7. Sattinger, Michael, 1998. "Statistical Discrimination with Employment Criteria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 205-37, February.
    8. Christopher J. Ruhm, 1998. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 285-317.
    9. Gibbons, Robert & Katz, Lawrence F., 1991. "Layoffs and Lemons," Scholarly Articles 3442782, Harvard University Department of Economics.
    10. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
    11. Wiji Arulampalam & Alison L. Booth, 2000. "Union status of young men in Britain: a decade of change," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(3), pages 289-310.
    12. Asplund, Rita, 2000. "Unemployment among Finnish Manufacturing Workers. Who Gets Unemployed and from Where?," Discussion Papers 711, The Research Institute of the Finnish Economy.
    13. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 121-54, January.
    14. David Blanchflower & Richard Freeman, 1996. "Growing Into Work," CEP Discussion Papers dp0296, Centre for Economic Performance, LSE.
    15. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-64, May.
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