The long-term effects of labor market entry in a recession: Evidence from the Asian financial crisis

Eleanor Choi, Jaewoo Choi and Hyelim Son

Labour Economics, 2020, vol. 67, issue C

Abstract: This study investigates the long-term effects of initial labor market conditions by comparing cohorts who graduated from college before, during, and after the 1997–1998 Asian financial crisis in South Korea. We measure the overall welfare effect by examining their labor market activities, family formation, and household finances. Using data from 20 waves of the Korean Labor and Income Panel Study, we find a substantial and persistent reduction in employment, earnings, marriage, fertility, and asset building among men who graduated during the recession. For women, limited job opportunities at graduation resulted in an increase in childbearing. We also find evidence that family provides a risk-sharing mechanism for recession graduates. Our results suggest that labor market entry in a large-scale recession has prolonged effects on a young worker’s life course even after the penalties in the labor market have disappeared.

Keywords: Recession; Financial crisis; Long-term effect; College graduate (search for similar items in EconPapers)
JEL-codes: E21 E32 J10 J20 J31 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: The Long-Term Effects of Labor Market Entry in a Recession: Evidence from the Asian Financial Crisis (2020)
Working Paper: The Long-Term Effects of Labor Market Entry in a Recession: Evidence from the Asian Financial Crisis (2020)
Working Paper: The Long-Term Effects of Labor Market Entry in a Recession: Evidence from the Asian Financial Crisis (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:67:y:2020:i:c:s0927537120301305

DOI: 10.1016/j.labeco.2020.101926

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