Abstract

"Does early-career unemployment cause future unemployment? The authors approach this question using German administrative matched employer - employee data that track almost 700,000 individuals over 24 years. Instrumenting early-career unemployment with firm-specific labour demand shocks, they find significant and long-lasting 'scarring effects'. In the mean, each additional day of unemployment during the first eight years on the labour market increases unemployment in the following 16 years by half a day. However, quantile regressions show that the scarring effects are much stronger for individuals who already suffer from lengthy and repeated spells of unemployment." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))