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The scarring effect of unemployment in ten European countries: an analysis based on the ECHP

Olivia Ekert-Jaffe and Isabelle Terraz

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: This paper investigates the effect of unemployment on earnings for ten European countries. Using an harmonised database (ECHP), we estimate the impact of declared unemployment on individuals while taking account of attrition and unobserved individual heterogeneity. We find that the unemployment effect differs by country and gender. The wage penalty is greater for men than for women. It is also higher in the more flexible economies. We suggest that labour market institutions such as unemployment benefits and wage-setting institutions may be avenues of investigation to explain these differences.

Keywords: Unemployment; Unobserved heterogeneity; post unemployment earnings. (search for similar items in EconPapers)
JEL-codes: J31 J64 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-eec, nep-eur and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2011-09

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