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Scarring Effects of the First Labor Market Experience

  • Nordström Skans, Oskar

    ()

    (Uppsala University)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5565.

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Length: 40 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5565
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  1. Stephen Knights & Mark Harris & Joanne Loundes, 2000. "Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence," Melbourne Institute Working Paper Series wp2000n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  2. Andrew Clark & Yannis Georgellis & Peter Sanfey, 1999. "Scarring: The Psychological Impact of Past Unemployment," Studies in Economics 9903, School of Economics, University of Kent.
  3. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992. "Earnings losses of displaced workers," Working Paper Series, Macroeconomic Issues 92-28, Federal Reserve Bank of Chicago.
  4. 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.
  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. Kolm, Ann-Sofie, 2005. "Work norms and unemployment," Economics Letters, Elsevier, vol. 88(3), pages 426-431, September.
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