Scars of recessions in a rigid labor market

Bart Cockx and Corinna Ghirelli

Labour Economics, 2016, vol. 41, issue C, 162-176

Abstract: We study the impact of graduating in recessions in the Belgian labor market, where high minimum wages protect the low educated against wage losses but possibly reinforce the unemployment risk. By contrast, due to labor regulations, the high-educated can get stuck in low-wage jobs. We find that a typical recession leaves the wages of the low-educated unaffected, but reduces their working time and earnings by about 4.5% for up to twelve years after graduation. For the high-educated, working time is not persistently affected, but hourly wages and earnings are. This wage and earnings penalty increases with experience, and reaches roughly −6% ten years after labor market entry.

Keywords: Scars; Graduating; Labor market rigidity; Recession (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927537116300239
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Scars of Recessions in a Rigid Labor Market (2015)
Working Paper: Scars of Recessions in a Rigid Labor Market (2015)
Working Paper: Scars of Recessions in a Rigid Labor Market (2015)
Working Paper: SCARS OF RECESSIONS IN A RIGID LABOR MARKET (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:41:y:2016:i:c:p:162-176

DOI: 10.1016/j.labeco.2016.05.009

Access Statistics for this article

Labour Economics is currently edited by A. Ichino

More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().