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Title: How Increased Labor Demand at the Start of Your Career Can Improve Long Run Outcomes

Citation Type: Miscellaneous

Publication Year: 2022

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Abstract: The literature has traditionally focused on the local unemployment rate one faces at the beginning of their career to measure how initial economic conditions affect long-run outcomes. However, the unemployment rate moves in response to changes in labor supply or labor demand. Using JOLTS State Estimates for job openings, hires, and separations along with Local Area Unemployment Statistics, I test how changes in more direct measures of demand at labor market entry affect long run outcomes. I find that for every one point increase in the local unemployed-to-job-opening ratio, annual earnings are reduced by 4.53% and remain depressed for 13 years. Conversely, I find that a one percentage point increase in the local job openings rate or the local quits rate, increases initial annual earnings by 8.15% and 14.23%, respectively.

Url: https://ideas.repec.org/s/tem/wpaper.html

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Authors: Mask, Joshua

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Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Methodology and Data Collection

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