Scarring Effects of the First Labor Market Experience

40 Pages Posted: 21 Mar 2011  

Oskar Nordstrom Skans

IFAU - Office of Labour Market Policy Evaluation; IZA Institute of Labor Economics

Date Written: March 1, 2011

Abstract

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.

Keywords: youth unemployment, scarring, state dependence, siblings

JEL Classification: J64

Suggested Citation

Nordstrom Skans, Oskar, Scarring Effects of the First Labor Market Experience (March 1, 2011). IZA Discussion Paper No. 5565. Available at SSRN: https://ssrn.com/abstract=1790676

Oskar Nordstrom Skans (Contact Author)

IFAU - Office of Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden
+46 18 471 70 79 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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