Scars of Youth Non-Employment and Labour Market Conditions
46 Pages Posted: 14 Apr 2021
Date Written: December 23, 2020
Abstract
In this paper I analyse whether non-employment periods at the initial stages of an individual’s career may increase workers’ propensity to experience non-employment also in subsequent years. The study is based on data on young individuals in Italy. The paper uses an instrumental variables approach to separate the effect of early non-employment from any residual unobserved heterogeneity. The results provide strong evidence of negative effects induced by early non-employment, but the size of these effects depends on individual and regional labour market characteristics. The negative repercussions of early non-employment are smaller during economic downturns or in regions with high unemployment rates.
Keywords: non-employment, labor market conditions, instrumental variables
JEL Classification: J64, C26, C34
Suggested Citation: Suggested Citation