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Scarring effects of the first labour market experience: A sibling based analysis

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The paper studies the relationship between teenagers’ first labour market experience and subsequent labour market performance using data on all Swedish youths graduating from vocational high school programmes in 1991–94. Sibling fixed-effects combined with detailed data on high school programmes, grades and work experience during high school are used in order to identify the causal long-run effects of experiencing unemployment subsequent to graduation. The results show a 3 percentage-points increase in the unemployment probability and a 17 % reduction in annual earnings after 5 years due to post-graduation unemployment. The results thus show that teenage labour market failure is in fact costly even though most teenagers have relatively short unemployment spells.

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  • Nordström Skans, Oskar, 2004. "Scarring effects of the first labour market experience: A sibling based analysis," Working Paper Series 2004:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2004_014
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    Cited by:

    1. M. Gartell, 2012. "The college-to-work transition during the 1990s: evidence from Sweden," Applied Economics, Taylor & Francis Journals, vol. 44(11), pages 1449-1469, April.
    2. Engdahl, Mattias & Godard, Mathilde & Skans, Oskar N., 2019. "Entrer sur le marché du travail en période de récession : quels effets sur le parcours familial ?," CEPREMAP Working Papers (Docweb) 1903, CEPREMAP.
    3. Mattias Engdahl & Mathilde Godard & Oskar Nordström Skans, 2024. "Early Labor Market Prospects and Family Formation," Journal of Human Resources, University of Wisconsin Press, vol. 59(5), pages 1564-1598.
    4. Oskar Skans & Linus Liljeberg, 2014. "The wage effects of subsidized career breaks," Empirical Economics, Springer, vol. 47(2), pages 593-617, September.
    5. Nordström Skans, Oskar & Liljeberg, Linus, 2005. "Causal effects of subsidized career breaks," Working Paper Series 2005:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. Verho, Jouko, 2008. "Scars of recession: the long-term costs of the Finnish economic crisis," Working Paper Series 2008:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Lundin, Andreas & Hemmingsson, Tomas, 2013. "Adolescent predictors of unemployment and disability pension across the life course – a longitudinal study of selection in 49 321 Swedish men," Working Paper Series 2013:25, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Marco Caliendo & Ricarda Schmidl, 2016. "Youth unemployment and active labor market policies in Europe," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-30, December.
    9. Francisco Perales, 2017. "Dynamics of job satisfaction around internal migrations: a panel analysis of young people in Britain and Australia," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(3), pages 577-601, November.
    10. Gartell, Marie, 2009. "Unemployment and subsequent earnings for Swedish college graduates: a study of scarring effects," Working Paper Series 2009:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    11. Hall, Caroline, 2009. "Does making upper secondary school more comprehensive affect dropout rates, educational attainment and earnings? Evidence from a Swedish pilot scheme," Working Paper Series 2009:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Egebark, Johan & Kaunitz, Niklas, 2013. "Do payroll tax cuts raise youth employment?," Working Paper Series 2013:27, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    13. Caroline Hall, 2012. "The Effects of Reducing Tracking in Upper Secondary School: Evidence from a Large-Scale Pilot Scheme," Journal of Human Resources, University of Wisconsin Press, vol. 47(1), pages 237-269.
    14. Luisa Natali & Bruno Martorano & Sudhanshu Handa & Goran Holmqvist & Yekaterina Chzhen, 2014. "Trends in Child Well-being in EU Countries during the Great Recession: A cross-country comparative perspective," Papers inwopa730, Innocenti Working Papers.
    15. Bell, David N.F. & Blanchflower, David G., 2011. "Youth Unemployment in Europe and the United States," IZA Discussion Papers 5673, Institute of Labor Economics (IZA).
    16. Görlich, Dennis & Stepanok, Ignat & Al-Hussami, Fares, 2013. "Youth unemployment in Europe and the world: Causes, consequences and solutions," Kiel Policy Brief 59, Kiel Institute for the World Economy (IfW Kiel).
    17. Egebark, Johan & Kaunitz, Niklas, 2018. "Payroll taxes and youth labor demand," Labour Economics, Elsevier, vol. 55(C), pages 163-177.
    18. Camilla Haw & Keith Hawton & David Gunnell & Stephen Platt, 2015. "Economic recession and suicidal behaviour: Possible mechanisms and ameliorating factors," International Journal of Social Psychiatry, , vol. 61(1), pages 73-81, February.

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    More about this item

    Keywords

    Youth unemployment; scarring; state dependence; siblings;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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