Long-term consequences of graduating at a bad time

Excerpt from calender. Job interview in red writing on date. Photo: colourbox.com

This working paper explores whether graduating at a bad time scars careers of youth when it comes to increased future unemployment and overpresentation in fixed-term and involuntary part-time work.

The paper is written by L. Hebling, S. Sacchi and C. Imdorf of the University of Basel (unibas.ch) (UNIBAS).

Compare five countries

These dynamics of scarring are investigated through a cross-country comparative perspective, looking at the UK, Germany, Switzerland, Spain and Finland.

Striking are the differences among the five countries, especially when looking at the institutional and economic dimensions, such as for example the different vocational orientation of their education systems, the strictness of employment protection legislation and active labour market policies to support job-search success of young people.

Overpresentation in insecure forms of work

The empirical analysis focuses on the long-term effects of the level of aggregate youth unemployment at graduation on career evolvement of school leavers over a period of 12 years since the moment of graduation, distinguishing between education groups and gender effects.

The research conducted shows that bad luck of entering the labour market scars future careers in the long run, it impacts subsequent cohort unemployment and leads to overpresentation in insecure forms of work, such as fixed-term and involuntary part-time employment. Therefore, a bad labour market can be considered as a major risk factor when it comes to the future integration of youth in different institutional contexts.

Long-term scarring effects persist for six years

The comparative analysis show that the long-term scarring effects tend to persist for at least six years, medium scarring effects last from about three to five years, while short term effects take up to two years from the moment of graduation.

The findings of this working paper should be of high interest to policy makers trying to prevent ‘lost generations’. As for further research, a more thorough understanding on which mechanisms are the relevant drivers of scarring in differential contexts and how scarring may shift in differential contexts in the light of the current changing world of work.

You can read the full version of the working paper here: Understanding cross-country variation in the long-term consequences of graduating at a bad time: A comparison of five European countries.