Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Řivind A. Nilsen
Scarring effects of unemployment.
() and Katrine Holm Reiso
Abstract: Using Norwegian individual register data of young workers,
from the period 1986-2008, we analyse whether there are large and
persistent negative relationships between unemployment and the risk of
repeated unemployment and being out of labour force. A nearest-neighbour
propensity score matching method is applied to make the treatment group
(the unemployed)and the control group (the employed) as similar as
possible. By tracking workers over a 10-year follow-up period, we find that
unemployment has a negative effect on later labour market attachment. This
is consistent with existing findings in the literature. The negative
effects decrease over time. Using the bounding approach proposed by
Rosenbaum (2002) to analyse the importance of unobserved variables, our
results indicate that a relatively high level of unobserved selection bias
could be present in the data before changing the inference. Thus,
unemployment leaves young workers with long-term scars.
Keywords: Unemployment persistency; scarring; matching technique.; (follow links to similar papers)
JEL-Codes: C23; J64; J65; (follow links to similar papers)
33 pages, December 1, 2011
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
DWSDownload.aspx?File=%2f ... on+papers%2f2011%2f26.pdf
Questions (including download problems) about the papers in this series should be directed to Dagny Hanne Kristiansen ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom