Unlucky Cohorts: Estimating the Long-Term Effects of Entering the Labor Market in a Recession in Large Cross-Sectional Data Sets

70 Pages Posted: 8 Oct 2018 Last revised: 13 Mar 2022

See all articles by Hannes Schwandt

Hannes Schwandt

Northwestern University

Till Von Wachter

University of California, Los Angeles (UCLA) - Department of Economics

Date Written: October 2018

Abstract

This paper studies the differential persistent effects of initial economic conditions for labor market entrants in the United States from 1976 to 2015 by education, gender, and race using labor force survey data. We find persistent earnings and wage reductions especially for less advantaged entrants that increases in government support only partly offset. We confirm the results are unaffected by selective migration and labor market entry by also using a double-weighted average unemployment rate at labor market entry for each birth cohort and state-of-birth cell based on average state migration rates and average cohort education rates from Census data.

Suggested Citation

Schwandt, Hannes and Von Wachter, Till, Unlucky Cohorts: Estimating the Long-Term Effects of Entering the Labor Market in a Recession in Large Cross-Sectional Data Sets (October 2018). NBER Working Paper No. w25141, Available at SSRN: https://ssrn.com/abstract=3262404

Hannes Schwandt (Contact Author)

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Till Von Wachter

University of California, Los Angeles (UCLA) - Department of Economics ( email )

8283 Bunche Hall
Los Angeles, CA 90095-1477
United States

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