Scarring effects of early job insecurity in five European countries

Parkour youths from Israel and Palestine

A new policy brief shows that bad luck in the timing of labour market entry can scar future careers of school leavers in countries across Europe.

The main objective of the Negotiate project is to investigate the long-term consequences of youth unemployment. The main findings show that on the macro-level bad luck in the timing of labour market entry can scar future careers of school leavers in countries across Europe over the long run.

The three in-depth country studies show both converging and complementary gender effects on the underlying process of scarring. However, more intersectional analyses of scarring processes is needed in which the interlocking effects of gender and education is taken into consideratio

With regards to the complexity of scarring, it appears that psychological wellbeing can act as both a consequence and as a moderator of scarring, which two of the researches on the complex relationship between employment experience and psychological wellbeing suggest.

The newly published policy brief covers the scarring effects of entering the labour market during a recession and being exposed to unemployment early in one’s career. This affects not only the short-term prospects, but may rather lead to long-term consequences for future job prospects and labour market integration.

The researchers involved in the project have simultaneously applied micro- and macro-level analyses drawing a differentiated and multifaceted picture of the scarring effects from a European comparative perspective. By using datasets such as the ‘European Labour Force Survey’ (EU-LFS) cross-national comparative results of long-term scarring were mapped, covering data from Finland, Germany, Switzerland, Spain and the United Kingdom to measure the aggregated employment insecurity and labour market entry experienced by different cohorts of school graduates.

The interesting thing about looking at data covering these five countries is that they differ greatly when it comes to the institutional and economic dimensions. These are assumed to lead to cross-nationally distinct patters in scarring effects: the vocational orientation of their educational systems, the strictness of employment protection legislation, their active labour market policies and the general prevalent youth unemployment.

All in all, there is no denying that entering the labour market at a bad time leads to adverse consequences for the careers of young people. However, there’s no consistent evidence for the expected impact of institutional and economic country contexts. This suggests that there is currently a theoretical deficit and hence a lack of really grasping the main drivers of scarring in different contexts.

Negotiate has expanded the knowledge of scarring mechanisms, and has identified a theoretical deficit in drivers under different contexts.

Accumulation of insecurity in the labour market over time is of importance to explain why some groups are more at risk of scarring than others. Therefore, when designing labour market regulations and active labour market policies the career trajectories should be taken into account rather than single jobs spells by focusing on trajectories instead of transitions, different approaches to and activation could emerge.

Read the policy brief: ‘Long term consequences of early job insecurity’ (pdf).