Page 60 - ePaper
P. 60
Employment and Social Developments in Europe 2014
3. The potential Chart 29: Employment rate one year after obtaining highest
long-term impacts education level (persons 20–29, not in education or training)
on people and society in 2008, 2009 and 2013
The long-term impact of the prolonged 100
recession, and the contribution of policies 90 2008
2009
intended to mitigate its effects, can be 80 2013
reviewed in the following terms: 70
60
• The scarring effect of early career % 50
unemployment for future employment 40
outcomes 30
20
• The ability of households to adapt to 10
adverse economic circumstances, draw - 0
ing on their savings or going into debt, DE ES EU-28 FR IT UK PL
by adjusting their consumption or pulling Source: Eurostat, LFS, DG EMPL calculations. Year of obtaining highest level of education is the
resources variable HATYEAR.
• The impacts on health and on access These ‘scarring effects’ in early stage Studies comparing the outcomes of
to healthcare of a life or career can impact on future those entering the labour market in bad
employment outcomes, earnings pros- times (i.e. when unemployment is high or
• The extent to which declining confi- pects, as well on health and general increasing) to previous or future genera-
58
dence in the ability of public institutions well-being ( ). This occurs in various tions (‘better-off’) ( 61 ) suggests that the
to address problems may impact on ways such as a depreciation (or non- negative effect of being unemployed at
social cohesion, weaken democracies, accumulation) of skills, negative signal- entry on future employment rates disap -
and inhibit effective policy making. ling effects for potential employers, or pears relatively quickly (i.e. in a three-
simply demotivation. A high level of edu- year period), though the catch-up period
3.1. Scarring effects of cation tends to attenuate potential scar - regarding wages can be longer, or even
unemployment — evidence ring effects, and impacts on the channels permanent ( ).
62
from most recent data through which they happen. In all cases,
it seems that some work experience, These somewhat different findings (com -
The scarring effects of early even if limited, is key to prevention ( ). pared to most papers on scarring effects,
59
career unemployment on Annex 2 contains an overview of litera- see Annex 2) may be due to the fact that
individuals: lessons from the past ture on the subject. they are based on data for a whole gen-
eration rather than individuals, but they
There is considerable existing knowledge Entering the labour market may also reflect the fact that the stigma
about ‘scarring effects’ for early career in bad times for a whole attached to having been unemployed may
unemployment ( 57 ) based on research generation: attempts to be weaker in times of crisis ( ). However,
63
that pre-dates the current recession. Such measure current impact such ‘scarring effects’ are generally seen
research shows that, while young people in terms of their long-term effects, and
tend to experience spells of unemployment While long-term effects are not yet fully findings relating to experiences in the
more frequently than adults, they gener- observable, analysing the labour mar- 1980s and 1990s cannot necessarily be
ally face shorter spells of unemployment. ket trajectories of those who entered the relevant to the current period.
In this context, a higher unemployment labour market during the crisis compared
rate among youth is generally explained to the previous generation — as carried Chart 29 shows that, over the period of
by the time needed to make the transi- out here — can be informative ( ). the recent crisis, the employment rate
60
tion from education to an appropriate job. of young people (aged 20–29 and no
However, there is evidence that unemploy - longer in education or training) one year
ment among young people is less and less ( ) The literature on scarring effects for early- after having obtained their highest level
58
a ‘temporary nuisance’ as spells increase career unemployment has been reviewed
in Eurofound (2012); European Commission
in length. Delays in making the transition (2013), Chapter 1; European Commission ( ) Such comparisons have been documented
61
to working life, and the lack of opportunity (2012c); Schmillen and Umkehrer (2013); in numerous countries, notably in Austria,
Canada, Germany, Japan, Norway, Sweden
Scarpetta et al. (2010). Most of the papers
to acquire on-the-job skills and knowledge, claim evidence of ‘true state dependence’ and the US, see for example the review of
papers conducted by Gaini et al (2012).
can have negative consequences for the scarring effects in individual unemployment ( ) See for instance Oreopoulos et al. (2012) for
histories but conclusions about the existence
62
individual and society as a whole (Euro - and magnitude of the effects somewhat Canada or Kahn (2010), for the US.
found 2012). vary. ( ) For instance, Biewen and Steffes (2010)
63
( ) See recent paper by IAB (2014) as well as argue for Germany that ‘if unemployment
59
Cockx and Picchio (2011) or Doiron and is relatively high, the stigma connected to
57
( ) The focus is mainly on young people due Gørgens (2008). it is lower because it is a more widespread
to the strong impact of the recession and ( ) Such methodological approach differs phenomenon’. Gaini et al (2012) also found,
60
because several authors argue that long- from most papers on scarring effects for France, that ‘unlucky’ young people (i.e.
term scarring effects are more likely to as it measures the overall impact on a leaving school during a recession) catch up
occur when unemployment is experimented generation, rather than focusing on the scars quickly (3 years) in terms of employment
early in the career, see for instance Bell and for those individuals having experienced with ’lucky’ ones (i.e. who entered the labour
Blanchflower (2011). unemployment spells. market during a boom).
58
3. The potential Chart 29: Employment rate one year after obtaining highest
long-term impacts education level (persons 20–29, not in education or training)
on people and society in 2008, 2009 and 2013
The long-term impact of the prolonged 100
recession, and the contribution of policies 90 2008
2009
intended to mitigate its effects, can be 80 2013
reviewed in the following terms: 70
60
• The scarring effect of early career % 50
unemployment for future employment 40
outcomes 30
20
• The ability of households to adapt to 10
adverse economic circumstances, draw - 0
ing on their savings or going into debt, DE ES EU-28 FR IT UK PL
by adjusting their consumption or pulling Source: Eurostat, LFS, DG EMPL calculations. Year of obtaining highest level of education is the
resources variable HATYEAR.
• The impacts on health and on access These ‘scarring effects’ in early stage Studies comparing the outcomes of
to healthcare of a life or career can impact on future those entering the labour market in bad
employment outcomes, earnings pros- times (i.e. when unemployment is high or
• The extent to which declining confi- pects, as well on health and general increasing) to previous or future genera-
58
dence in the ability of public institutions well-being ( ). This occurs in various tions (‘better-off’) ( 61 ) suggests that the
to address problems may impact on ways such as a depreciation (or non- negative effect of being unemployed at
social cohesion, weaken democracies, accumulation) of skills, negative signal- entry on future employment rates disap -
and inhibit effective policy making. ling effects for potential employers, or pears relatively quickly (i.e. in a three-
simply demotivation. A high level of edu- year period), though the catch-up period
3.1. Scarring effects of cation tends to attenuate potential scar - regarding wages can be longer, or even
unemployment — evidence ring effects, and impacts on the channels permanent ( ).
62
from most recent data through which they happen. In all cases,
it seems that some work experience, These somewhat different findings (com -
The scarring effects of early even if limited, is key to prevention ( ). pared to most papers on scarring effects,
59
career unemployment on Annex 2 contains an overview of litera- see Annex 2) may be due to the fact that
individuals: lessons from the past ture on the subject. they are based on data for a whole gen-
eration rather than individuals, but they
There is considerable existing knowledge Entering the labour market may also reflect the fact that the stigma
about ‘scarring effects’ for early career in bad times for a whole attached to having been unemployed may
unemployment ( 57 ) based on research generation: attempts to be weaker in times of crisis ( ). However,
63
that pre-dates the current recession. Such measure current impact such ‘scarring effects’ are generally seen
research shows that, while young people in terms of their long-term effects, and
tend to experience spells of unemployment While long-term effects are not yet fully findings relating to experiences in the
more frequently than adults, they gener- observable, analysing the labour mar- 1980s and 1990s cannot necessarily be
ally face shorter spells of unemployment. ket trajectories of those who entered the relevant to the current period.
In this context, a higher unemployment labour market during the crisis compared
rate among youth is generally explained to the previous generation — as carried Chart 29 shows that, over the period of
by the time needed to make the transi- out here — can be informative ( ). the recent crisis, the employment rate
60
tion from education to an appropriate job. of young people (aged 20–29 and no
However, there is evidence that unemploy - longer in education or training) one year
ment among young people is less and less ( ) The literature on scarring effects for early- after having obtained their highest level
58
a ‘temporary nuisance’ as spells increase career unemployment has been reviewed
in Eurofound (2012); European Commission
in length. Delays in making the transition (2013), Chapter 1; European Commission ( ) Such comparisons have been documented
61
to working life, and the lack of opportunity (2012c); Schmillen and Umkehrer (2013); in numerous countries, notably in Austria,
Canada, Germany, Japan, Norway, Sweden
Scarpetta et al. (2010). Most of the papers
to acquire on-the-job skills and knowledge, claim evidence of ‘true state dependence’ and the US, see for example the review of
papers conducted by Gaini et al (2012).
can have negative consequences for the scarring effects in individual unemployment ( ) See for instance Oreopoulos et al. (2012) for
histories but conclusions about the existence
62
individual and society as a whole (Euro - and magnitude of the effects somewhat Canada or Kahn (2010), for the US.
found 2012). vary. ( ) For instance, Biewen and Steffes (2010)
63
( ) See recent paper by IAB (2014) as well as argue for Germany that ‘if unemployment
59
Cockx and Picchio (2011) or Doiron and is relatively high, the stigma connected to
57
( ) The focus is mainly on young people due Gørgens (2008). it is lower because it is a more widespread
to the strong impact of the recession and ( ) Such methodological approach differs phenomenon’. Gaini et al (2012) also found,
60
because several authors argue that long- from most papers on scarring effects for France, that ‘unlucky’ young people (i.e.
term scarring effects are more likely to as it measures the overall impact on a leaving school during a recession) catch up
occur when unemployment is experimented generation, rather than focusing on the scars quickly (3 years) in terms of employment
early in the career, see for instance Bell and for those individuals having experienced with ’lucky’ ones (i.e. who entered the labour
Blanchflower (2011). unemployment spells. market during a boom).
58
