Family Background at Labour-Market Entry: Who Can Afford Early-Career Risk?

Esperanza Vera-Toscano and Ana Gamarra Rondinel

No 12703, CESifo Working Paper Series from CESifo

Abstract: Using longitudinal data from the HILDA Survey, this paper examines how socioeconomic disadvantage before labour-market entry shapes early-career labour-market pathways and whether family resources moderate these associations. We model hardship dynamically over ages 4–24 and relate pre-adult trajectories to labour-market risk and precarious-employment pathways over ages 25–30. We identify substantial heterogeneity in both pre-adult hardship and early-adult labour-market experiences, revealing dimensions of inequality that static measures of family background and adult outcomes overlook. Persistent hardship is strongly associated with persistently adverse labour-market trajectories, while moving out of hardship, volatile hardship, and no hardship are linked to substantially lower risks of sustained disadvantage. Family resources partially moderate these associations, but the effects depend on resource type. Short-term insurance provides the clearest buffering role, reducing entry into high-persistent and worsening trajectories. Overall, family resources operate primarily as private insurance against sustained labour-market risk rather than as a mechanism supporting strategic tolerance of precarious work.

Keywords: intergenerational inequality, labour-market risk, precarious employment, family wealth; economic hardship, HILDA survey (search for similar items in EconPapers)
JEL-codes: D31 I32 J62 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12703

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