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Scarring Effects of the First Labor Market Experience

Author

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  • Nordström Skans, Oskar

    () (Uppsala University)

Abstract

The paper studies the relationship between teenagers' first labor market experience and subsequent labor market performance using data on all Swedish youths graduating from vocational high schools in the recession years of 1991-94. Sibling fixed-effects combined with detailed data on high school programs, grades and work experience during high school are used in order to identify the causal long-run effects of post-graduation unemployment. The results show significant scarring effects resulting in higher risks of unemployment up to 5 years later. The results imply that poor labor market performance as a teenager result in persistent, but not permanent, negative effects.

Suggested Citation

  • Nordström Skans, Oskar, 2011. "Scarring Effects of the First Labor Market Experience," IZA Discussion Papers 5565, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5565
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    References listed on IDEAS

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    1. Clark, Andrew E & Georgellis, Yannis & Sanfey, Peter, 2001. "Scarring: The Psychological Impact of Past Unemployment," Economica, London School of Economics and Political Science, vol. 68(270), pages 221-241, May.
    2. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    3. Knights, Stephen & Harris, Mark N & Loundes, Joanne, 2002. "Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 284-298, September.
    4. François Rycx & David Marsden, 2009. "Wage structures, employment adjustments and globalisation: evidence from linked and firm-level panel data sets," ULB Institutional Repository 2013/13446, ULB -- Universite Libre de Bruxelles.
    5. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    6. Burgess, Simon & Propper, Carol & Rees, Hedley & Shearer, Arran, 2003. "The class of 1981: the effects of early career unemployment on subsequent unemployment experiences," Labour Economics, Elsevier, vol. 10(3), pages 291-309, June.
    7. Kolm, Ann-Sofie, 2005. "Work norms and unemployment," Economics Letters, Elsevier, vol. 88(3), pages 426-431, September.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Au mauvais endroit au mauvais moment? Le devenir des primo-entrants sur un marché du travail en crise
      by arthur.heim@education.gouv.fr (Arthur Heim) in BS Initiative on 2014-06-17 13:09:18

    Citations

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    Cited by:

    1. Eva O. Arceo-Gómez & Raymundo M. Campos-Vázquez, 2011. "¿Quiénes son los NiNis en México?," Working papers DTE 524, CIDE, División de Economía.
    2. Möller Joachim & Umkehrer Matthias, 2015. "Are there Long-Term Earnings Scars from Youth Unemployment in Germany?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 474-498, August.
    3. Hall, Caroline, 2016. "Does more general education reduce the risk of future unemployment? Evidence from an expansion of vocational upper secondary education," Economics of Education Review, Elsevier, vol. 52(C), pages 251-271.
    4. Jorge A. Paz, 2012. "Desempleo juvenil en la Argentina durante la recuperación económica," Working Papers 9, Instituto de Estudios Laborales y del Desarrollo Económico (IELDE) - Universidad Nacional de Salta - Facultad de Ciencias Económicas, Jurídicas y Sociales.
    5. Björklund, Anders, 2006. "Family Background and Outcomes Later in Life: A (Partial and Personal) Survey of Recent Research Using Swedish Register Data," Working Paper Series 4/2007, Stockholm University, Swedish Institute for Social Research.
    6. Nordin , Martin, 2014. "Does Eligibility for Tertiary Education Affect Crime Rates? Quasi-Experimental Evidence," Working Papers 2014:14, Lund University, Department of Economics.
    7. López-Martín Bernabé & Takayama Naoki, 2015. "The Blighted Youth: The Impact of Recessions and Policies on Life-Cycle Unemployment," Working Papers 2015-22, Banco de México.
    8. Verho, Jouko, 2017. "Economic crises and unemployment persistence: Analysis of job losses during the Finnish 1990s recession," Working Papers 99, VATT Institute for Economic Research.
    9. Niebuhr, Annekatrin & Buch, Tanja, 2013. "Wage effects of labor market entry via temporary work agency employment - evidence for German apprenticeship graduates," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79818, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    youth unemployment; scarring; state dependence; siblings;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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