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Socioeconomic Decline and Death: Midlife Impacts of Graduating in a Recession

Hannes Schwandt () and Till von Wachter ()
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Hannes Schwandt: Northwestern University
Till von Wachter: University of California, Los Angeles

No 12908, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper uses several large cross-sectional data sources and a new approach to estimate midlife effects of entering the labor market in a recession on mortality by cause and various measures of socioeconomic status. We find that cohorts coming of age during the deep recession of the early 1980s suffer increases in mortality that appear in their late 30s and further strengthen through age 50. We show these mortality impacts are driven by disease-related causes such as heart disease, lung cancer, and liver disease, as well as drug overdoses. At the same time, unlucky middle-aged labor market entrants earn less and work more while receiving less welfare support. They are also less likely to be married, more likely to be divorced, and experience higher rates of childlessness. Our findings demonstrate that temporary disadvantages in the labor market during young adulthood can have substantial impacts on lifetime outcomes, can affect life and death in middle age, and go beyond the transitory initial career effects typically studied.

Keywords: labor market entry conditions; long-term effects; mortality (search for similar items in EconPapers)
JEL-codes: E32 I10 J10 (search for similar items in EconPapers)
Pages: 70 pages
Date: 2020-01
New Economics Papers: this item is included in nep-hea, nep-lab and nep-mac
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