Heterogenous effects of entering the labor market during a recession - new evidence from Germany

Abstract

"This article studies the career effects of entering the labor market during a recession in Germany. Relying on administrative linked employer-employee data, and by exploiting institutional variation in the timing of graduation for identification, it provides new evidence on effect heterogeneities along the dimensions of skill and wage rigidity. The results show that less advantaged graduates experience persistent earnings declines as a result of adverse economic starting conditions. In sectors with higher collective bargaining coverage, these declines are driven by reduced employment stability while in sectors with lower coverage they are mainly driven by wage loss. Careers of more advantaged graduates, in turn, either recover gradually from the recession through a process of job-to-job, occupational, regional, and educational mobility, or are not negatively affected at all." (Author's abstract, IAB-Doku) ((en))

Cite article

Umkehrer, M. (2019): Heterogenous effects of entering the labor market during a recession - new evidence from Germany. In: CESIfo Economic Studies, Vol. 65, No. 2, p. 177-203. DOI:10.1093/cesifo/ifz003