The scars of youth: Effects of earlyâ€ career unemployment on future unemployment experience
Achim Schmillen and
International Labour Review, 2017, vol. 156, issue 3-4, 465-494
Does earlyâ€ career unemployment cause future unemployment? The authors approach this question using German administrative matched employerâ€“employee data that track almost 700,000 individuals over 24 years. Instrumenting earlyâ€ career unemployment with firmâ€ specific labour demand shocks, they find significant and longâ€ lasting â€œscarring effectsâ€ . In the mean, each additional day of unemployment during the first eight years on the labour market increases unemployment in the following 16 years by half a day. However, quantile regressions show that the scarring effects are much stronger for individuals who already suffer from lengthy and repeated spells of unemployment.
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