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

71 Pages Posted: 19 Nov 2018

See all articles by Hannes Schwandt

Hannes Schwandt

Princeton University - Center for Health and Wellbeing

Till von Wachter

Columbia Business School - Economics Department; IZA Institute of Labor Economics

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.

Keywords: job market entry, recessions, unemployment, long-term effects

JEL Classification: J2, J3, J6

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. IZA Discussion Paper No. 11926. Available at SSRN: https://ssrn.com/abstract=3286186

Hannes Schwandt (Contact Author)

Princeton University - Center for Health and Wellbeing ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

Till Von Wachter

Columbia Business School - Economics Department ( email )

420 West 118th Street
New York, NY 10027
United States

IZA Institute of Labor Economics

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

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