The Long-Term Effects of Labor Market Entry in a Recession: Evidence from the Asian Financial Crisis

54 Pages Posted: 7 Aug 2019 Last revised: 29 Aug 2019

See all articles by Eleanor Jawon Choi

Eleanor Jawon Choi

Hanyang University

Jaewoo Choi

Korea Development Institute (KDI)

Hyelim Son

University of Seoul - Department of Economics

Date Written: August 27, 2019

Abstract

This paper investigates the long-term effects of initial labor market conditions by comparing cohorts who graduated from college before, during, and after the 1997–1998 Asian financial crisis. We measure the overall welfare impact by examining not only labor market activities but also family formation and wealth accumulation. Using data from 20 waves of the Korean Labor and Income Panel Study, we find a substantial and persistent reduction in employment, earnings, marriage, fertility, and financial assets among men who graduated in a bad economy. For women, limited job opportunities at graduation result in an increase in childbearing.

Keywords: recession, financial crisis, long-term effects, college graduates

JEL Classification: E32, J13, E21, J21

Suggested Citation

Choi, Eleanor Jawon and Choi, Jaewoo and Son, Hyelim, The Long-Term Effects of Labor Market Entry in a Recession: Evidence from the Asian Financial Crisis (August 27, 2019). Available at SSRN: https://ssrn.com/abstract=3431443 or http://dx.doi.org/10.2139/ssrn.3431443

Eleanor Jawon Choi (Contact Author)

Hanyang University ( email )

College of Economics and Finance
222 Wangsimni-ro, Seongdong-gu
Seoul, 04763
Korea, Republic of (South Korea)

HOME PAGE: http://sites.google.com/view/eleanorjchoi/

Jaewoo Choi

Korea Development Institute (KDI) ( email )

263 Namsejong-ro
Sejong-si 30149
Korea, Republic of (South Korea)

Hyelim Son

University of Seoul - Department of Economics ( email )

Seoul, 130-743
Korea

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