Which Path do You Choose, and Does It Matter? Industry Trajectories and Subsequent Earnings of Forced Migrants

Abstract This paper employs a novel two-step approach to examine the link between early industry experience and later income. First, we use sequence analysis to identify the typical industry trajectories followed between 1992 and 2011 by forced migrants from the Former Yugoslav Republic (FYR). Second, we estimate wage regressions for the period 2012–2021, using the assigned trajectory as the key variable of interest while accounting for both observed and unobserved individual characteristics. The results show that industry trajectories exhibit considerable stability over time, with manufacturing being the only industry identified as a stepping-stone to other sectors. Migrants who experience prolonged unemployment appear to face long-term consequences, earning lower incomes in future employment. By contrast, those who enter knowledge-intensive services tend to earn higher incomes, even after transitioning into lower-wage industries. Overall, the findings indicate a strong association between migrants’ earlier industry experiences and their later labor market outcomes.