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Unemployment and subsequent earnings for Swedish college graduates: a study of scarring effects

  • Gartell, Marie

    ()

    (Institute for Futures Studies)

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    Unemployment immediately upon graduation is associated with substantial and permanent future earnings losses. Even for very short unemployment spells the estimated earnings losses are statistically significant. These results are stable for the inclusion of a rich set of observable control variables, including grade point average from high school and parental educational level, and for choice of method i.e. OLS and propensity score matching. This lends some support for the interpretation that unemployment upon graduation has the causal effect of reducing future earnings prospects.

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    File URL: http://www.ifau.se/upload/pdf/se/2009/wp09-10.pdf
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    Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2009:10.

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    Length: 34 pages
    Date of creation: 23 Apr 2009
    Date of revision:
    Handle: RePEc:hhs:ifauwp:2009_010
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    1. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    2. Biewen, Martin & Steffes, Susanne, 2010. "Unemployment persistence: Is there evidence for stigma effects?," Economics Letters, Elsevier, vol. 106(3), pages 188-190, March.
    3. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
    4. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, vol. 62(2), pages 405-58, March.
    5. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2006. "The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates," NBER Working Papers 12159, National Bureau of Economic Research, Inc.
    6. Paul Gregg & Emma Tominey, 2004. "The Wage Scar from Youth Unemployment," The Centre for Market and Public Organisation 04/097, Department of Economics, University of Bristol, UK.
    7. Arulampalam, Wiji, 2002. "State Dependence in Unemployment Incidence: Evidence for British Men Revisited," IZA Discussion Papers 630, Institute for the Study of Labor (IZA).
    8. Gregory, Mary & Jukes, Robert, 2001. "Unemployment and Subsequent Earnings: Estimating Scarring among British Men 1984-94," Economic Journal, Royal Economic Society, vol. 111(475), pages F607-25, November.
    9. Marcus Eliason & Donald Storrie, 2006. "Lasting or Latent Scars? Swedish Evidence on the Long-Term Effects of Job Displacement," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 831-856, October.
    10. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
    11. Nordström Skans, Oskar, 2004. "Scarring effects of the first labour market experience: A sibling based analysis," Working Paper Series 2004:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Virve Ollikainen, 2006. "Gender Differences in Transitions from Unemployment: Micro Evidence from Finland," LABOUR, CEIS, vol. 20(1), pages 159-198, 03.
    13. Claudio Lupi & Patrizia Ordine, 2002. "Unemployment scarring in high unemployment regions," Economics Bulletin, AccessEcon, vol. 10(2), pages 1-8.
    14. Ferrall, Christopher & Betts, Julian & Finnie, Ross, 2000. "The Transition to Work for Canadian University Graduates: Time to First Job, 1982-1990," Analytical Studies Branch Research Paper Series 2000141e, Statistics Canada, Analytical Studies Branch.
    15. Guido W. Imbens, 2003. "Nonparametric Estimation of Average Treatment Effects under Exogeneity: A Review," NBER Technical Working Papers 0294, National Bureau of Economic Research, Inc.
    16. Carlsson, Magnus & Rooth, Dan-Olof, 2007. "Evidence of ethnic discrimination in the Swedish labor market using experimental data," Labour Economics, Elsevier, vol. 14(4), pages 716-729, August.
    17. Heckman, James J & Borjas, George J, 1980. "Does Unemployment Cause Future Unemployment? Definitions, Questions and Answers from a Continuous Time Model of Heterogeneity and State Dependence," Economica, London School of Economics and Political Science, vol. 47(187), pages 247-83, August.
    18. repec:ebl:ecbull:v:10:y:2002:i:2:p:1-8 is not listed on IDEAS
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