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Bad Times, Bad Jobs? How Recessions Affect Early Career Trajectories

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  • Stüber, Heiko
  • Mahajan, Parag
  • Patki, Dhiren

Abstract

Workers who enter the labor market during recessions experience lasting earnings losses, but the role of non-pay amenities in exacerbating or counteracting these losses remains unknown. Using population-scale data from Germany, we find that labor market entry during recessions generates a 5 percent reduction in earnings cumulated over the first decade of experience. Implementing a revealed-preference estimator of employer quality that aggregates information from the universe of worker moves across employers, we find that 17 percent of recession-induced earnings losses are compensated by non-pay amenities. Purely pecuniary estimates can therefore overstate the welfare costs of labor market entry during recessions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Stüber, Heiko & Mahajan, Parag & Patki, Dhiren, 2023. "Bad Times, Bad Jobs? How Recessions Affect Early Career Trajectories," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277617, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc23:277617
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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • 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
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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