UiS Working Papers in Economics and Finance
Venke Furre Haaland
The Lost Generation: Effects of Youth Labor Market Opportunities on Long-Term Labor Market Outcomes
Abstract: The labor market conditions that youth face at the typical
age of labor market entry can impact their success in the labor market.
Utilizing registry data for all Norwegian males born in 1961–1975, I
demonstrate that local unemployment rates at the typical age of graduation
from compulsory school (age 16) and high-school (age 19) have persistent,
negative effects on males’ earnings, employment, and disability pension
utilization when measured as late as age 35. With data on every male IQ, I
am able to study how labor market conditions at age of graduation have
varying effects for low- and high-ability males. As expected, low-ability
males are particularly vulnerable to business cycles at the time of labor
market entry. For low-ability youth, a 1 percentage point increase in the
local unemployment rate at age 16 reduces earnings at age 35 by about 4
percent and increases the likelihood of being on disability pension by
about 20 percent.
Keywords: .; (follow links to similar papers)
JEL-Codes: A10; (follow links to similar papers)
48 pages, December 10, 2013
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