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The impact of labor market entry conditions on initial job assignment and wages


Brunner, Beatrice; Kuhn, Andreas (2014). The impact of labor market entry conditions on initial job assignment and wages. Journal of Population Economics, 27(3):705-738.

Abstract

We estimate the effects of labor market entry conditions on wages for male individuals first entering the Austrian labor market between 1978 and 2000. We find a large negative effect of unfavorable entry conditions on starting wages and a sizable negative long-run effect. Our preferred estimates imply a decrease in starting wages by about 0.9 % and a lifetime loss in wages of about 1.3 % for an increase in the initial local unemployment rate by one percentage point. We show that poor entry conditions are associated with lower quality of a worker's first employer and that the quality of workers' first employer explains as much as three-quarters of the observed long-run wage effects resulting from poor entry conditions. Moreover, wage effects are much more persistent for blue-collar workers because some of them appear to be permanently locked in into low-paying jobs/tasks.

Abstract

We estimate the effects of labor market entry conditions on wages for male individuals first entering the Austrian labor market between 1978 and 2000. We find a large negative effect of unfavorable entry conditions on starting wages and a sizable negative long-run effect. Our preferred estimates imply a decrease in starting wages by about 0.9 % and a lifetime loss in wages of about 1.3 % for an increase in the initial local unemployment rate by one percentage point. We show that poor entry conditions are associated with lower quality of a worker's first employer and that the quality of workers' first employer explains as much as three-quarters of the observed long-run wage effects resulting from poor entry conditions. Moreover, wage effects are much more persistent for blue-collar workers because some of them appear to be permanently locked in into low-paying jobs/tasks.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:National licences > 142-005
Dewey Decimal Classification:Unspecified
Scopus Subject Areas:Social Sciences & Humanities > Demography
Social Sciences & Humanities > Economics and Econometrics
Uncontrolled Keywords:Economics and Econometrics, Demography
Language:English
Date:1 July 2014
Deposited On:23 Jul 2019 09:53
Last Modified:15 Apr 2021 15:07
Publisher:Springer
ISSN:0933-1433
OA Status:Green
Publisher DOI:https://doi.org/10.1007/s00148-013-0494-4

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