Labour Market Trajectories Research Articles

Information Frictions and Skill Signaling in the Youth Labor Market

This paper provides evidence that information frictions limit the labor market trajectories of US youth. We provide credible skill signals—recommendation letters based on supervisor feedback—to a random subset of 43,409 participants in New York’s summer jobs program. Letters increase employment the following year by 3 percentage points (4.5 percent). Earnings effects grow over four years to a cumulative $1,349 (4.9 percent). We find little evidence of increased job search or confidence; instead, signals may help employers better identify successful matches with high-productivity workers. Pulling youth into the labor market can, however, hamper on-time graduation, especially among low-achieving students. (JEL D82, H75, J13, J24, J31, J64)

Polycystic ovary syndrome and labor market attachment in Swedish women

Abstract Background Polycystic ovary syndrome (PCOS) is a common endocrine disorder in women of fertile age and is associated with several burdensome comorbidities. We use Swedish longitudinal register data to identify and compare clusters of employment trajectories among working age women, in order to investigate how PCOS affects labor market attachment. Data and Methods A cohort of 157,356 women born in 1975-1977 were followed annually between the ages of 30 and 39. Labor market states were constructed by combining detailed data on various types of earned income. PCOS was identified through national inpatient and outpatient registers. Sociodemographic covariates (civil status, region of origin, highest attained education, number of children) were measured at the age of 29 years. Sequence analysis was used to identify clusters of typical labor market trajectories. Multinomial logistic regression was employed to assess the associations between being diagnosed with PCOS and belonging to the identified clusters. Results Women with PCOS spent less time in employment and were more dependent on sickness benefits during the follow-up time than those without PCOS. Five clusters of trajectories were identified: stable employment, education into employment, labor market exclusion, continuous unstable position, long-term sickness. Compared to being in stable employment cluster, women diagnosed with PCOS were 97% more likely to experience long-term sickness (RRR (relative risk ratio): 1.97 [CI: 1.90-2.05]), and had 11% higher risk of belonging to education into employment (RRR: 1.11 [CI: 1.07-1.15]) and a 4% higher risk (RRR: 1.04 [CI: 1.00-1.09]) of experiencing labor market exclusion. The magnitude of the association increased for education into employment and labor market exclusion after adjusting for covariates. Conclusions PCOS can lead to disadvantaged labor market outcomes and better strategies are needed in order to prevent economic exclusion among women diagnosed with the condition. Key messages • PCOS leads to disadvantaged labor market outcomes. • Women with PCOS may experience economic exclusion.

Unemployed and then? The role of non‐standard employment in labour market trajectories after unemployment

AbstractNon‐standard employment (NSE) might offer employment opportunities for unemployed workers, who would not find a job otherwise and can improve their human capital while working in NSE instead of being unemployed. NSE thus could serve as a bridge to regular, permanent employment. However, these stepping stone effects might not occur in a segmented labour market, when the accumulated human capital is not useful for regular jobs or NSE is not a positive signal to potential employers. Using German administrative data and sequence and cluster analysis, this article examined the labour market trajectories of initially unemployed individuals between 2012 and 2015 over a 4‐year period with a focus on four common forms of NSE. The results indicate that NSE is not limited to marginal groups but 62% of the initially unemployed belong to a cluster with a substantial share of NSE. Furthermore, while most individuals stay in NSE, some regular full‐time employment occurs after NSE.

Family Formation and Employment Changes Among Descendants of Immigrants in France: A Multiprocess Analysis

This paper investigates the association between family formation and the labour market trajectories of immigrants’ descendants over the life course. Using rich data from the Trajectories and Origins survey from France, we apply multilevel event history models to analyse the transitions in and out of employment for both men and women by parity. We account for unobserved co-determinants of childbearing and employment by applying a simultaneous-equations modelling. Our analysis shows that women’s professional careers are negatively associated with childbirth. There are differences across descendant groups. The female descendants of Turkish immigrants are more likely to exit employment and less likely to re-enter employment following childbirth than women from other groups. The negative impact of childbearing on employment is slightly overestimated among women due to unobserved selection effects. Among men, the descendants of European immigrants are less likely to exit employment after having a child than other descendant groups. The study demonstrates the negative effect of childbearing on women’s employment, which is pronounced for some minority groups suggesting the need for further policies to help women reconcile work with family life.

Welcome back! The impact of ‘return initiatives’ on return migration to rural regions

Abstract This article studies the effect of return initiatives in rural regions of Germany on interregional return migration. The initiatives aim to increase return migration by, amongst other things, providing information on local employment opportunities and personal support to workers interested in returning to find a job in the former rural region of residence. Analysing administrative data on individual labour market trajectories through survival analysis and difference-in-differences estimation, we find that return initiatives, on average, promote interregional return migration. Among the considered workers, particularly those in the middle and at the top of the wage distribution are more likely to return.

What else? Immigrant–native cohorts entering the labour market under a context of adverse shocks: the great recession and COVID-19

Purpose This paper aims to analyse the short- and long-term effects of entering the Spanish labour market under tough economic conditions on young immigrant–native earnings and employment outcomes. Design/methodology/approach The authors use cohorts, where the entry cohort into the labour market is the unit of observation. As a database, the authors use the continuous sample of working histories covering the period 2007–2021. Then, the authors estimate the model using weighted least squares. Findings The results show that the great recession and COVID-19 led to a blockage at the entrance of the labour market, reducing the number of workers. Additionally, the authors observe an adverse impact in terms of employment and earnings on those entering the labour market. Besides, this effect varies in intensity and persistence for natives and immigrants, as well as by country of birth, age of entry, gender and educational level. Originality/value A contribution to the literature is the analysis of the earnings and employment trajectories of young people entering the Spanish labour market for the first time during an adverse shock, such as the 2008 economic crisis or the COVID-19 crisis, and the possible differences that exist between native and immigrant workers. So, the authors analyse the labour market trajectories of workers covering the most recent years. Likewise, the authors carry out an extensive heterogeneity analysis in which they distinguish workers by educational level, gender, age of entry into the labour market and immigrants by their country of birth. This represents an additional contribution. The use of a cohort approach also contributes to the existing literature.

A Structural Analysis of Mental Health and Labour Market Trajectories

Abstract We analyse the joint life-cycle dynamics of labour market and mental health outcomes while allowing for two-way interactions between work and mental health. We model selection into jobs on a labour market with search frictions, accounting for the level of exposure to stress in each job using data on occupational health contents. Taking our model to British data from Understanding Society combined with information from O*NET, we estimate the impact of job characteristics on health dynamics and the effects of health and job stress contents on career choices. We use our model to quantify the effects of job loss, health shocks, or job stress shocks that propagate over the life cycle through both health and work channels. We also estimate the (large) values workers attach to health, employment, or nonstressful jobs.

Institutional heterogeneity in the education and earnings returns to postsecondary technical education: Evidence from Missouri

AbstractWe estimate the education and earnings returns to enrolling in technical 2‐year degree programs at community colleges in Missouri. A unique feature of the Missouri context is the presence of a highly regarded, nationally ranked technical college: State Technical College of Missouri (State Tech). We find that enrolling in a technical program in Missouri increases the likelihood of associate degree attainment and post‐enrollment earnings, but that the positive effects statewide are driven largely by students who attend State Tech. These findings demonstrate the potential for a high‐performing community college to change students' education and labor market trajectories. At the same time, they exemplify the potential for substantial institutional heterogeneity in the returns to postsecondary education.

Labour market trajectories and unemployment of older workers in Europe after the Great Recession

AbstractMany European countries want to overcome the early exit from labour market which was widespread since the 1970s through pension reform and labour policies. The extension of working life is hindered by factors that the literature overlooks. This article focuses on the discontinuity of the late‐career caused by unemployment. The aim is to investigate whether older workers are at risk of unemployment and what are the transitions after spells of unemployment. The labour market trajectories of workers over 50s in 11 European countries from 2006 to 2019 were analysed, specifically after the Great Recession and before the Covid‐19 epidemic. It is based on longitudinal survey data from the generated Survey of Health, Ageing and Retirement in Europe Job Episodes Panel. Event history analysis and sequence analysis were performed. Older employees are unlikely to face unemployment. The transition rate highlights the difficulty for older workers into re‐employment. A low education level increases the risk of unemployment and remaining unemployed. Data by country confirm the trend towards overcoming the transition from unemployment to early exit. Divergences concern the higher risk of being trapped in unemployment in Southern European countries such as Greece and Italy.

Crossing the Finish Line but Losing the Race? Socioeconomic Inequalities in the Labor Market Trajectories of Community College Graduates

Abstract Despite decades and hundreds of billions of dollars of federal and state investment in policies to promote postsecondary educational attainment as a key lever for increasing the economic mobility of lower income populations, research continues to show large and meaningful differences in the mid-career earnings of students from families in the bottom and top income quintiles. Prior research has not disentangled whether these disparities are due to differential sorting into colleges and majors, or due to barriers that lower socioeconomic status (SES) graduates encounter during the college-to-career transition. Using linked individual-level higher education and Unemployment Insurance records for nearly a decade of students from the Virginia Community College System, we compare the labor market outcomes of higher and lower SES community college graduates within the same college, program, and academic performance level. Our analyses show that, conditional on employment, lower SES graduates earn nearly $500/quarter less than their higher SES peers one year after graduation, relative to higher SES graduate average of $10,846/quarter. The magnitude of this disparity persists through at least three years after graduation. Disparities are concentrated among non-nursing programs, in which gaps persist seven years from graduation. Our results highlight the importance of greater focus on the college-to-career transition.

Adolescent Psychiatric Inpatient Episodes and Subsequent Labor Market Trajectories

PurposeAdolescents with psychiatric disorders are known to be more often not in education, employment, or training (NEET) in young adulthood than their peers. However, since most of the available evidence is based on cross-sectional measurement of NEET, there is less evidence on the processes underlying these differences in labor market disadvantage. We assessed these processes by examining transitions between NEET and non-NEET states across young adulthood and the differences in these transitions by adolescent psychiatric inpatient treatment. MethodsWe used longitudinal register data on all individuals born in Finland in 1980–1984 (N = 315,508) to identify psychiatric inpatient episodes between ages 10 and 19 and NEET between ages 20 and 34. We modeled the transitions between NEET and non-NEET states and the impact of psychiatric disorders on these transitions with multistate models. ResultsIndividuals who had psychiatric inpatient episodes in adolescence started their labor market careers as NEET twice as often as their peers. They were also more likely to transition into NEET states and less likely to transition out of NEET. In total, individuals with a history of psychiatric episodes spent from 1.8 to 6.9 more years as NEET between the ages 20 and 34 than their peers, depending on sex, baseline NEET, and diagnostic group. DiscussionAdolescents with severe psychiatric disorders are highly vulnerable in terms of labor market outcomes throughout their early adulthood. Supportive measures are required both at the start of employment trajectories and during later career stages.

Between life course regimes and biographical orientations: labour market trajectories of refugee mothers in Germany from a gendered perspective

Abstract After arrival, refugees face the challenge of reordering their biographies in new social contexts that are framed by certain life course policies, institutionalised bureaucratic processes and norms. How do processes of adherence to and adaptation of familiar routines and orientations take shape among refugee women with care responsibilities in Germany? Following on from existing literature on life course, refugee and biographical research, this article enriches current research by adding a gender-sensitive analysis of the labour market trajectories of refugee mothers in Germany. Based on biographically oriented interviews with 22 women with children who fled to Germany from predominantly Arab countries between 2015 and 2020, two findings are presented and discussed: a) different phases of arrival framed by different life course policies and norms unfold in various bureaucratic settings, and b) three different labour market orientations and strategies depending on the women’s biographical orientations, their renegotiation in unfamiliar environments and the life stage the women currently find themselves in. The results provide new insights into the biographical trajectories of refugee women’s labour market participation and challenge a predominantly static view of this group as homogeneous in terms of qualifications, care responsibilities and employment aspirations.

Mobility and labor market trajectories of Ukrainian migrants to Poland in the context of the 2014 Russian invasion of Ukraine

ABSTRACT The 2014 Russian invasion of Ukraine resulted, among other things, in a dramatic increase in Ukrainian emigration to Europe, particularly to Poland. The article evaluates its consequences, by confronting trajectories of pre- and post- 2014 war male and female Ukrainian migrants to Poland. The comparisons combine mobility and migrants’ labor market paths linked to employment sectors. On data from surveys conducted in two Polish cities – Warsaw and Wrocław – in 2018-2019, we performed sequence analysis revealing seven clusters of trajectories, serving as a dependent variable in the multinomial regression analysis. We found that the war context contributed to the growth of permanency in Ukrainian migration, challenging a temporary mobility model observed in Ukraine-to-Poland migration for over two decades, which involves demographic consequences for Ukrainian society. In Poland, post-2014 war migrants are more likely than earlier cohorts to work in the new migrant niches, but contribute also to the revitalization of old ones. All of this contributes to structural changes in the Polish labor market. Importantly, we did not find evidence for a refugee penalty in economic integration, which we link to the mix of economic and humanitarian drivers of post-war Ukrainian migration to Poland.

WHO WORKS LONGER IN LATER LIFE? KEY VARIATIONS IN WORKING LIFE EXPECTANCY IN INTERNATIONAL PERSPECTIVE

Abstract In the context of population aging, policymakers are eager to encourage and enable longer working lives, assuming this will lead to increased tax revenue and reduced demand on social security and health care systems. Simultaneously, individuals who work longer will gain additional income and may experience the psychosocial benefits that come from workplace engagement. However, many factors drive early labor market exit, and blanket policy strategies to extend working lives often ignore the nuances that shape the length of real working lives. Such policies have emerged partly from increased life expectancies, although these measures fail to capture subgroup differences in the capacity to continue working. They also do not account for often discontinuous labor market trajectories, particularly around retirement. As such, scholars have turned to more refined methodologies and concepts like working life expectancy (WLE) to better inform policies that actively aim to increase retirement ages. This symposium highlights an ongoing program of work by the IDEAR network, which examines WLE using longitudinal studies of aging in Europe. The symposium features results from Sweden and England, estimating WLE using multi-state models. Unlike other approaches to estimate life expectancy employing the Sullivan method, this approach allows for reversible transitions between work and non-work, reflecting the dynamic and complex nature of modern labor market transitions and exits. The symposium further presents how WLE varies according to key determinants, including socioeconomic status, healthy lifestyles, and unpaid caregiving, highlighting the policy implications that emerge from recognizing inequalities and variations in WLE across vulnerable subgroups.

Constraints on the Labour Market Trajectory of Youth and Growth of NEET in India

This paper explores the trends, composition, and determinants of the rising ‘Not in Employment, Education and Training (NEET)’ population in India. Based on the national level employment-unemployment surveys and macro level panel data, and using instrumental variable (IV) Probit and system generalized method of moments (GMM) regression models, it is explored that a set of supply and demand side factors determining the growth of NEET population in India. At the micro level, the individual’s level of general education, technical and vocational training, gender, occupation and gender of head of the family, religion, standard of living of the family, earnings of the spouse, and a set of complex socio-cultural factors determine the NEET status of educated and trained youth. On the other hand, the macro level factors, including the growth of mechanization in agriculture, stagnant real wages, sluggish non-farm sector output growth, infrastructural backwardness, and the existing social-cultural setup in which educated youth live together create a negative macro level environment that compels them to remain out of the workforce for a longer period even after completion of their education/training. Based on these results, it is argued that policies aiming at the development of infrastructure along with the promotion of industry and modern service sectors should be given the top priority for checking the upsurge in the NEET population in India.

Adolescent psychiatric inpatient treatment and subsequent labor market trajectories

Abstract Background Adolescent psychiatric disorders are associated with subsequent labor market disadvantage, including unemployment, disability pensions, and not being in education, employment or training (NEET). However, most current research has focused on cross-sectional outcomes measured at single time points, which clouds the dynamics involved in the realization of early labor market careers. Methods The study is based on longitudinal register data on all individuals born in Finland in 1980-1984 and residing in the country between ages 10-20 (N = 316,526). We followed the study subjects from age 20 to 34 and used multistate models to model transitions between advantaged and disadvantaged labor market states. Labor market disadvantage was defined as being either unemployed, NEET or on disability pension. We examined differences in labor market trajectories by adolescent psychiatric inpatient episodes, measured using hospital discharge data from ages 10-19. Separate analyses by diagnostic groups were conducted. Results Individuals who had psychiatric inpatient episodes in adolescence (3%) started their labor market careers in disadvantaged labor market states twice as often as their peers. They were also more likely to transition from advantaged states to disadvantaged states (HR among men: 2.93; 95% CI: 2.85, 3.02) and less likely to experience the opposite transition (HR among men: 0.47; 95% CI: 0.46, 0.48). In total, individuals with a history of psychiatric episodes spent 1.7 to 6.7 more years in disadvantaged states than their peers, depending on sex, baseline state and diagnostic group. The associations were slightly stronger among men than among women. Conclusions The results suggest that adolescents with severe mental health problems are highly vulnerable in terms of labor market outcomes throughout their early adulthood. Supportive measures at the start of employment trajectories as well as during later labor market stages are required. Key messages • Psychiatric inpatient episodes in adolescence are associated with labor market disadvantage at the start of work careers and with disadvantageous transitions throughout subsequent trajectories. • To ensure that adolescents facing severe mental health problems are able to realize their full potential, supportive measures at different stages of work careers are required.

Labour market trajectories after part-time sickness absence: a nationwide cohort study from Finland

ObjectivesThe use of part-time sickness absence (pSA) enables return to part-time work from full sickness absence. However, subsequent labour market outcomes of pSA users depend on various individual and work-related...

The Road to Retirement: A Life Course Perspective on Labor Market Trajectories and Retirement Behaviors

Abstract While a prolonged working life has been mainly feasible for people with the most advantageous working careers, knowledge about the barriers for those with vulnerable occupational paths is still scarce. This study explores the conditions for prolonged working life from a perspective on labor market trajectories. Drawing from a gendered life course perspective and that (dis)advantageous tends to accumulate over time, we investigate the opportunity structure for the most disadvantaged workers and which characteristics of labor market trajectories can explain the decision to work longer. To this end, a Swedish longitudinal survey and register data from the Panel Survey of Ageing and the Elderly (PSAE) were used, following people across a substantial part of their working life. With sequence analysis, we identified 5 trajectories that represent typical labor market trajectories from mid-life until retirement age. Our findings showed that labor market precarity in mid-life remained a key characteristic until the expected retirement age, showing both early signs of early labor market exit and a precarity trap into a prolonged working life. These findings emphasize the need to identify at-risk groups early in their careers and that mid-life interventions are needed to prevent involuntary labor market exits and to ensure a sustainable working life. In particular, the need to protect older workers with turbulent or precarious labor market trajectories against labor market risks and retirement schemes that could inadvertently contribute to increased social and economic inequality in later life.

Correction to: Transformed ‘postmodern’ life courses? Continuity and change in young adults’ labour market trajectories in Norway

Correction to: Transformed ‘postmodern’ life courses? Continuity and change in young adults’ labour market trajectories in Norway

Gender Inequality Reinforced: The Impact of a Child's Health Shock on Parents' Labor Market Trajectories.

This article employs a couple-level framework to examine how a child's severe illness affects within-family gender inequality. We study parental labor market responses to a child's cancer diagnosis by exploiting an event-study methodology and rich individual-level administrative data on hospitalizations and labor market variables for the total population in Finland. We find that a child's cancer negatively affects the mother's and the father's labor income. The effect is considerably larger for women, increasing gender inequality beyond the well-documented motherhood penalty. We test three potential moderators explaining the more negative outcomes among mothers: (1) breadwinner status, (2) adherence to traditional gender roles and conservative values, and (3) the child's care needs. We find that mothers who are the main breadwinner experience a smaller reduction in their household income contribution than other mothers. Additionally, working in a gender-typical industry and a child's augmented care needs reinforce mothers' gendered responses. These findings contribute to the literature by providing new insights into gender roles when a child falls ill and demonstrating the effects of child health on gender inequality in two-parent households.