Do youths graduating in a recession incur permanent losses?

Comparing long-term scarring effects of unemployment across countries: the impact of graduating during an economic downturn

“…Graduating at a time of higher aggregate youth unemployment affects subsequent cohort unemployment and leads to over-representation in insecure forms of work such as fixed-term and involuntary part-time employment. Increased unemployment and engagement in marginal forms of work may be thought to further hamper the career advancement of youth cohorts; for example, it might affect their wages (Cockx, 2016), professional development (Van den Berge and Brouwers, 2017) or the skill adequacy of their employment. These aspects are not depicted in this study but deserve more in-depth attention in scarring analyses in future research so as to obtain a more comprehensive understanding of how a short-term scar in one employment domain may relate to longer-term scars in other domains.…”

“…EPL has been rather liberal in the United Kingdom and Switzerland (especially for young workers), whereas in Germany, Spain and Finland the protection of the permanent workforce has been stricter and more highly regulated since the 1990s (Hora et al, 2016). In contrast to those employed on permanent contracts, young workers in Spain on fixed-term contracts have weaker employment protection (Cockx, 2016). Following Hypothesis 2, we expect young people to experience less severe scars and to be less likely to end up in marginal and less secure forms of employment in countries with liberal employment protection − such as Switzerland and the United Kingdom (because [re-]entry may be easier if they happen to become unemployed) − than in countries with stricter employment protection.…”

“…Laura Alexandra Helbling, Stefan Sacchi and Christian Imdorf -9781788118798 Downloaded from Elgar Online at 07/04/2020 10:27:54AM via free access countries analysed. One reason might be that highly educated youth (e.g., college graduates) may have experienced smaller but more persistent penalties from graduating in a recession − especially in rigid labour markets (Cockx, 2016) − than the upper-secondary school cohorts analysed in this contribution. Nonetheless, our findings show some interesting patterns: whereas national unemployment contexts seem to matter more for unemployment scarring, EPL contexts seem more relevant with respect to involuntary part-time work.…”

“…In order to obtain clear-cut conclusions regarding the moderating role of different institutional characteristics, the analysis would need to be extended to a larger number of countries (including non-European countries) representing institutional variations as fully as possible, and also to longer observation spans. Cockx (2016) has found that the evidence from European studies concerning persistent scarring effects from graduating in a recession are generally less clear cut because those countries occupy…”

“…Our focus is on the impact of aggregate youth unemployment in the year of graduation on the career advancement of uppersecondary school-leavers in the first 12 years after graduation. We focus on upper-secondary school graduates − disregarding both upper-secondary dropouts and tertiary graduates − because the persistence of scarring effects depends on education level (the effects for college graduates are more persistent but smaller; Cockx, 2016) and also for reasons of data availability and space limitation. Helbling et al (2017) have analysed outcomes for tertiary graduates in the five countries studied in this contribution.…”