Labour market entry and early career mobility shortly before, during and after the Great Recession in Germany

Abstract

In December 2007, the United States subprime mortgage crisis triggered not only turbulences on global financial markets but also worldwide economic slowdown. This ‘Great Recession’ hit labour markets in Europe. Using time-series data on unemployment, fixed-term employment and real wages, this paper describes economic changes in Germany and European average before, during and shortly after the Great Recession. Based on these macro data, it is clear that Germany experienced a unique path of development compared to other European societies. We then analyse the impact of the financial crisis on labour market entry and early career processes in Germany, comparing young people who started their first jobs shortly before, during and after the Great Recession. Using longitudinal data from the National Educational Panel Study (NEPS), we apply ordinary regression analysis and discrete-time event history models. Findings show that, in Germany, job prestige at labour market entry has in fact not changed for men during the economic crisis in comparison to the situation before and afterwards. Low-educated women (only) were more likely to start employment in a lower prestige job during the crisis than at other times. However, years of schooling appeared more important for men's early upward career mobility, if they entered the labour market during the financial crisis. Furthermore, less-educated women entering employment in the crisis were even more likely to be upward mobile. We observe little change in early downward career mobility for men and women after starting their first employment in Germany over the Great Recession.