Early Career Effects of Entering the Labor Market During Higher Education Expansion

Johannes Goehausen () and Stephan Thomsen
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Johannes Goehausen: Leibniz University of Hannover

No 17487, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We evaluate the labor market effects of an increasing supply of high-skilled labor, resulting from a higher education expansion at established German universities. Exploiting variation in exposure across regions and cohorts, we estimate early career effects for labor market entrants. We find that high-skilled wages decline initially, particularly in non-graduate jobs, but recover over the first five years of experience. Medium-skilled workers are barely affected, while low-skilled workers benefit from higher wage growth in non-routine-intensive jobs. We explain the dynamics of the effects by two countervailing mechanisms: immediate supply effects and gradual technology effects through increasing skilled labor demand.

Keywords: higher education expansion; labor market entry; wages; regional labor markets (search for similar items in EconPapers)
JEL-codes: I23 I26 J31 R23 (search for similar items in EconPapers)
Pages: 74 pages
Date: 2024-11
New Economics Papers: this item is included in nep-lma and nep-ure
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