Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Unemployment and subsequent earnings for Swedish college graduates: a study of scarring effects
Abstract: Unemployment immediately upon graduation is associated
with substantial and permanent future earnings losses. Even for very short
unemployment spells the estimated earnings losses are statistically
significant. These results are stable for the inclusion of a rich set of
observable control variables, including grade point average from high
school and parental educational level, and for choice of method i.e. OLS
and propensity score matching. This lends some support for the
interpretation that unemployment upon graduation has the causal effect of
reducing future earnings prospects.
Keywords: Scarring; State dependence; Higher education; College-to-work; (follow links to similar papers)
JEL-Codes: J24; J31; J64; (follow links to similar papers)
34 pages, April 23, 2009
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