IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp10069.html
   My bibliography  Save this paper

Help Not Wanted: The Dismal Science of Youth Unemployment's Scarring Effect

Author

Listed:
  • Glatt, Jordan

    ()

  • Wunnava, Phanindra V.

    () (Middlebury College)

Abstract

The scarring effect is defined as an increase in the probability of future unemployment spells and the reduction of subsequent wages as the result of joblessness early in one's working years. Many youths get into a rut at the beginning of their professional careers when they become unemployed, hindering future individual prospects and producing negative consequences for the economy as a whole. Because there is considerable evidence in the United States that early job displacement is followed by a higher risk of subsequent unemployment and lower trajectory for future earnings after re-entry, it is crucial to gain a better understanding of the economic factors that influence the youth unemployment rate in order to reduce the consequences on youths' future outlooks (Arulampalam, Gregg, and Gregory, 2001). This study not only demonstrates that the scarring effect is real but also allows for policy recommendations to be obtained from this analysis.

Suggested Citation

  • Glatt, Jordan & Wunnava, Phanindra V., 2016. "Help Not Wanted: The Dismal Science of Youth Unemployment's Scarring Effect," IZA Discussion Papers 10069, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10069
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp10069.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Bart Cockx & Matteo Picchio, 2013. "Scarring effects of remaining unemployed for long-term unemployed school-leavers," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(4), pages 951-980, October.
    2. Richard B. Freeman & David A. Wise, 1982. "The Youth Labor Market Problem: Its Nature Causes and Consequences," NBER Chapters,in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 1-16 National Bureau of Economic Research, Inc.
    3. Robert Kaestner, 1996. "The Effect of Government-Mandated Benefits on Youth Employment," ILR Review, Cornell University, ILR School, vol. 50(1), pages 122-142, October.
    4. David Neumark & William Wascher, 2004. "Minimum Wages, Labor Market Institutions, and Youth Employment: A Cross-National Analysis," ILR Review, Cornell University, ILR School, vol. 57(2), pages 223-248, January.
    5. Misbah Tanveer Choudhry & Enrico Marelli & Marcello Signorelli, 2012. "Youth unemployment rate and impact of financial crises," International Journal of Manpower, Emerald Group Publishing, vol. 33(1), pages 76-95, March.
    6. Arulampalam, Wiji, 2001. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," Economic Journal, Royal Economic Society, vol. 111(475), pages 585-606, November.
    7. Stephen Hills, 1990. "Race and sex differences in the effects of early unemployment on wages," The Review of Black Political Economy, Springer;National Economic Association, vol. 18(4), pages 13-36, March.
    8. Gorry, Aspen, 2013. "Minimum wages and youth unemployment," European Economic Review, Elsevier, vol. 64(C), pages 57-75.
    9. Andreas Knabe & Steffen Rätzel, 2011. "Scarring or Scaring? The Psychological Impact of Past Unemployment and Future Unemployment Risk," Economica, London School of Economics and Political Science, vol. 78(310), pages 283-293, April.
    10. Olga Demidova & Marcello Signorelli, 2012. "Determinants of youth unemployment in Russian regions," Post-Communist Economies, Taylor & Francis Journals, vol. 24(2), pages 191-217, January.
    11. Görlich, Dennis & Stepanok, Ignat & Al-Hussami, Fares, 2013. "Youth unemployment in Europe and the world: Causes, consequences and solutions," Kiel Policy Brief 59, Kiel Institute for the World Economy (IfW).
    12. Trine Filges & Birthe Larsen, 2004. "The Impact of Youth Unemployment Policy: A Shift of Workers into the Skilled Labour Force," LABOUR, CEIS, vol. 18(3), pages 379-414, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:taf:defpea:v:28:y:2017:i:5:p:511-533 is not listed on IDEAS

    More about this item

    Keywords

    re-entry; scarring; youth unemployment; unemployment spells; job displacement; earnings; Great Recession;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp10069. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak). General contact details of provider: http://www.iza.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.