The Effect of Parental Background on Youth Duration of Unemployment

This paper analyses the relationship between unemployment among young Italians and their parents’ economic and cultural background. A search theory model was used to identify the direct and indirect effects of household financial situation and parental cultural and educational status on their employment prospects. The empirical specification of the model featured Lancaster’s (1985a) simultaneous estimate of two variables: duration of unemployment and accepted starting wage in a new job. The data was sampled from the European Community Household Panel for an eight-year period (1994-2001) with a specific focus on unemployed Italians below the age of thirty-six years who were living with their parents while looking for work. The study revealed that young people from disadvantaged social backgrounds experienced greater difficulties in finding a job than their more privileged peers. This trend was particularly marked in southern regions of Italy where, paradoxically, the discrepancy was more pronounced at higher levels of educational qualifications. In Northern Italy, on the other hand, young male graduates who finished their degree courses without a delay were unemployed for shorter periods. Finally, work experience was an influential factor to finding employment for all young Italians, irrespective of their residential area and educational experience.