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How Increased Labor Demand at the Start of Your Career Can Improve Long Run Outcomes

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  • Joshua Mask

    (Department of Economics, Temple University)

Abstract

The literature has traditionally focused on the local unemployment rate one faces at the beginning of their career to measure how initial economic conditions affect long-run outcomes. However, the unemployment rate moves in response to changes in labor supply or labor demand. Using JOLTS State Estimates for job openings, hires, and separations along with Local Area Unemployment Statistics, I test how changes in more direct measures of demand at labor market entry affect long run outcomes. I find that for every one point increase in the local unemployed-to-job-opening ratio, annual earnings are reduced by 4.53% and remain depressed for 13 years. Conversely, I find that a one percentage point increase in the local job openings rate or the local quits rate, increases initial annual earnings by 8.15% and 14.23%, respectively.

Suggested Citation

  • Joshua Mask, 2022. "How Increased Labor Demand at the Start of Your Career Can Improve Long Run Outcomes," DETU Working Papers 2201, Department of Economics, Temple University.
    • Handle: RePEc:tem:wpaper:2201
    as

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    File URL: http://www.cla.temple.edu/RePEc/documents/DETU_22_01.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    wage scarring; labor discrimination; Job Openings and Labor Turnover Survey;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • 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

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