Scarring Effects of the First Labor Market Experience
Oskar Nordstrom Skans
IFAU - Office of Labour Market Policy Evaluation; Institute for the Study of Labor (IZA)
March 1, 2011
IZA Discussion Paper No. 5565
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.
Number of Pages in PDF File: 40
Keywords: youth unemployment, scarring, state dependence, siblings
JEL Classification: J64
Date posted: March 21, 2011
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