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Youth Unemployment in Europe and the United States

Author

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  • Bell, David N.F.

    () (University of Stirling)

  • Blanchflower, David G.

    () (Dartmouth College)

Abstract

This paper focuses particularly on youth unemployment, why we should be concerned about it, why it is increasing again, how the present difficulties of young people entering the labour market differ from those of the past and what useful lessons have been learned that may guide future policy. We focus on Europe and USA, but introduce evidence from other countries where appropriate. Our analysis of the UK NCDS birth cohort data provides evidence supporting the notion that early adulthood unemployment creates long lasting scars which affect labour market outcomes much later in life. Our chosen variables are weekly wages and happiness. Our results show significant effects at age 50 from early adulthood unemployment. These affects are stronger than more recent unemployment experiences.

Suggested Citation

  • Bell, David N.F. & Blanchflower, David G., 2011. "Youth Unemployment in Europe and the United States," IZA Discussion Papers 5673, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5673
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    References listed on IDEAS

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    1. 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.
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    Cited by:

    1. Bargain, Olivier & Doorley, Karina, 2009. "Caught in the Trap? The Disincentive Effect of Social Assistance," IRISS Working Paper Series 2009-10, IRISS at CEPS/INSTEAD.
    2. Eichhorst, Werner & Hinte, Holger & Rinne, Ulf, 2013. "Jugendarbeitslosigkeit in Europa: Status Quo und (keine?) Perspektiven," IZA Standpunkte 57, Institute for the Study of Labor (IZA).
    3. Hyslop, Dean & Stillman, Steven, 2004. "Youth Minimum Wage Reform and the Labour Market," IZA Discussion Papers 1091, Institute for the Study of Labor (IZA).
    4. Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1998. "Minimum Wages and Employment in France and the United States," Papiers du Laboratoire de Microéconomie Appliquée 1998-12, Université Panthéon-Sorbonne (Paris 1).
    5. Mariana Balan & University & Carmen-Marilena Uzlau & Hyperion University & Corina Maria Ene Hyperion University, 2012. "Evolutions Of Unemployment Among The Young Over The Economic And Financial Downturn," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-16.
    6. Bruno Crépon & Francis Kramarz, 1999. "Working 40 hours or Not-Working 39 : Lessons from the 1981 Mandatory Reduction of Weekly Working Hours," Working Papers 99-12, Center for Research in Economics and Statistics.
    7. Stefan Eriksson & Dan-Olof Rooth, 2014. "Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment," American Economic Review, American Economic Association, pages 1014-1039.
    8. Luttmer Erzo F.P., 2007. "Does the Minimum Wage Cause Inefficient Rationing?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-42, October.
    9. Daly, M. & Delaney, L., 2013. "The scarring effect of unemployment throughout adulthood on psychological distress at age 50: Estimates controlling for early adulthood distress and childhood psychological factors," Social Science & Medicine, Elsevier, vol. 80(C), pages 19-23.
    10. Alok Kumar, 2008. "Capital Tax, Minimum Wage, and Labor Market Outcomes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 133-154, January.
    11. Heather Antecol & Peter Kuhn & Stephen J. Trejo, 2006. "Assimilation via Prices or Quantities?: Sources of Immigrant Earnings Growth in Australia, Canada, and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    12. Richard V. Burkhauser & Kosali I. Simon, 2008. "Who Gets What From Employer Pay or Play Mandates?," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 11(1), pages 75-102, March.
    13. Ngai, Steven Sek-yum & Cheung, Chau-kiu & Yuan, Rui, 2016. "Effects of vocational training on unemployed youths' work motivation and work engagement: Mediating roles of training adequacy and self-actualization," Children and Youth Services Review, Elsevier, vol. 63(C), pages 93-100.
    14. Camp, Kevin & Waldorf, Brigitte, 2014. "The impact of spatial flexibility on unemployment duration in young college-educated workers," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170678, Agricultural and Applied Economics Association.
    15. Sandirasegarane, Sharmila & Sutermaster, Staci & Gill, Alyssa & Volz, Jennifer & Mehta, Khanjan, 2016. "Context-driven entrepreneurial education in vocational schools," International Journal for Research in Vocational Education and Training (IJRVET), European Research Network in Vocational Education and Training (VETNET), European Educational Research Association, vol. 3(2), pages 106-126.
    16. John Moffat & Duncan Roth, 2014. "Cohort size and youth labour-market outcomes: the role of measurement error," MAGKS Papers on Economics 201440, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    17. Bruno Crepon & Francis Kramarz, 2002. "Employed 40 Hours or Not Employed 39: Lessons from the 1982 Mandatory Reduction of the Workweek," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1355-1389, December.
    18. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
    19. Antecol, Heather & Kuhn, Peter J. & Trejo, Stephen, 2003. "Assimilation via Prices or Quantities? Labor Market Institutions and Immigrant Earnings Growth in Australia, Canada, and the United States," IZA Discussion Papers 802, Institute for the Study of Labor (IZA).
    20. Jeremy W Bray & Brooks Depro & Dorren McMahon & Marion Siegle & Lee Mobley, 2016. "Disconnected Geography: A Spatial Analysis of Disconnected Youth in the United States," Journal of Labor Research, Springer, vol. 37(3), pages 317-342, September.
    21. Luis Beccaria & Roxana Maurizio & Martin Trombetta & Gustavo Vázquez, 2016. "Una evaluación del efecto scarring en Argentina," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, vol. 77, August.
    22. Fathi Fakhfakh & Annick Vignes & Jihan Ghrairi, 2015. "Youth ! ... How did you find your job ?," Working Papers hal-01253907, HAL.
    23. Ruesga, Santos M. & Da Silva Bichara, Julimar & Pérez Trujillo, Manuel, 2015. "La Gran Recesión y sus efectos sobre la eficiencia del mercado laboral. Un estudio aplicado a nivel regional para determinar el mismatch agregado en España /The Great Recession and its Effects on Labo," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 33, pages 175-200, Enero.

    More about this item

    Keywords

    youth unemployment; scarring effects; happiness;

    JEL classification:

    • 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

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