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Off to a bad start: youth nonemployment and labor market outcomes later in life

Year: 2025

Type: article

Abstract: We estimate the effect of nonemployment experienced by Italian youth after secondary school exit on subsequent labor market outcomes. We focus on the impact on earnings and labor market participation both in the short term and in the long term. By estimating a factor-analytic model that controls for time-varying unobserved heterogeneity, we find that the negative effect of nonemployment on earnings is persistent, being sizeable and statistically significant up to 25 years after school completion. Penalties in terms of participation last instead shorter. Hence, early nonemployment operates by persistently locking the youth who get off to a bad start into low-wage jobs.

Source: Empirical Economics

DOI: 10.1007/s00181-025-02735-y

Authors: Mattia Filomena, Isabella Giorgetti, Matteo Picchio

Institutions: University of Bergamo, Marche Polytechnic University, IZA - Institute of Labor Economics, Ghent University

Language: English

Topic: Education and Labor Relations

Subfield: Political Science and International Relations

Field: Social Sciences

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities

Open Access status: hybrid

Estimated APC paid: $3,490