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Title: Teenage Unemployment: Permanent Scar or Temporary Blemish
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Ellwood, David T. |
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Teenage Unemployment: Permanent Scar or Temporary Blemish Presented: Arlie House, VA, Conference on Youth Joblessness and Employment, National Bureau of Economic Research, 1979 Cohort(s): Young Men Publisher: National Bureau of Economic Research (NBER) Keyword(s): Heterogeneity; Teenagers; Unemployment, Youth; Work History Several important conclusions derive from the early pattern of labor market performances of young men: (1) The early years of labor market experience are times of substantial change. Employment rates rise, as do participation rates. Considerable evidence shows weak labor force attachment early in many young men's careers. (2) Although the distinction between time out of labor force and time unemployed is conceptually appealing, the division is not accurately captured in these retrospective data. Unemployment rates behave very erratically over time for this group. All of the results in this chapter suggest that time not employed is a far better measure of the labor market performance of young men. (3) Even though a general improvement in employment rates appears for these young men over time, early labor market patterns persist. Young men with poor records early will typically have comparatively poor records later. (4) Controls for heterogeneity eliminate at least two-thirds of the observed persistence in employment, but evidence of experience dependence remains. That is, even controlling for individual differences in the propensity to work, experience dependence remains. However, the absolute magnitude of the effect is small. There is no evidence in these data that time out of work sets off a long term cycle of recurring "nonemployment." (5) Early work experience has a sizeable impact on wages. Controlling for individual effects, experience in the second, third, or fourth year out of school tends to be associated with wage increases of between 10 and 20 percent a year. |
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Bibliography Citation
Ellwood, David T. "Teenage Unemployment: Permanent Scar or Temporary Blemish." Presented: Arlie House, VA, Conference on Youth Joblessness and Employment, National Bureau of Economic Research, 1979. |