Off to a Bad Start: Youth Nonemployment and Labor Market Outcomes Later in Life

Mattia Filomena, Isabella Giorgetti and Matteo Picchio

No 15366, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We estimate the effect of nonemployment experienced by Italian youth after leaving secondary school on subsequent labor market outcomes. We focus on the impact on earnings and labor market participation both in the short- and in the long-term, up to 25 years since school completion. By estimating a factor analytic model which controls for time-varying unobserved heterogeneity, we find that the negative effect of nonemployment on earnings is especially persistent, being sizeable and statistically significant up to 25 years after school completion, for both men and women. Penalties in terms of participation last instead shorter; they disappear by the 10th year after school completion. Hence, early nonemployment operates by persistently locking the youth who get off to a bad start into low-wage jobs.

Keywords: labor market participation; earnings; scarring effects; youth nonemployment; factor analytic model (search for similar items in EconPapers)
JEL-codes: J01 J08 J31 J64 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2022-06
New Economics Papers: this item is included in nep-eur, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - published online in: Empirical Economics , 08 April 2025

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Related works:
Working Paper: OFF TO A BAD START: YOUTH NONEMPLOYMENT AND LABOR MARKET OUTCOMES LATER IN LIFE (2022)
Working Paper: Off to a bad start: youth nonemployment and labor market outcomes later in life (2022)
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