Cross-national analysis of the short- and longer-term effects of conditions at labor market entry

This report uses European Union Labour Force Survey (EU-LFS) survey data to examine the longer-term impact of regional economic conditions at labor market entry on labor market exclusion (non-employment) and insecurity (temporary contracts and low-skilled jobs). The analyses are based on young adults who entered the labor market in Europe between 1994 and 2011. The focus is on whether poor economic conditions at entry increase the risk of scarring effects for these entry cohorts. To identify the effect of economic conditions at labor market entry, we exploit year-to-year variation in unemployment rates in European regions (NUTS1) and examine labor market outcomes 5 to 10 years later (i.e., between 1999 and 2021). We explore effect heterogeneity by gender and level of education and examine potential moderating effects of various labor market policies.