Bad Times, Bad Jobs? How Recessions Affect Early Career Trajectories

Abstract

"Studies find that if a worker enters the labor market during an economic downturn versus a period of expansion, they likely will have more difficulty finding a high-paying job, because the availability of such jobs is strongly procyclical. The earnings penalty for starting a career during bad times is both substantial and persistent. Indeed, this paper finds that a typical recession causes entrants to experience a 6 percent loss in earnings cumulated over the first 15 years of their careers. But, the authors ask, to what extent do non-pecuniary characteristics of jobs offset some of those earnings losses? They address this question by relying on population-scale linked employer-employee administrative data from Germany to estimate both the pecuniary and non-pecuniary impact of entering the workforce during a recession." (Author's abstract, IAB-Doku) ((en))

Cite article

Mahajan, P., Patki, D. & Stüber, H. (2022): Bad Times, Bad Jobs? How Recessions Affect Early Career Trajectories. (Working paper / Federal Reserve Bank of Dallas, Research Department 22-12), Boston, 21 p. DOI:10.29412/res.wp.2022.12