Early failure in the labor market: Childhood and adolescent predictors of unemployment in the transition to adulthood

We investigate the childhood and adolescent predictors of youth unemployment in a longitudinal study of young adults who have been studied for the 21 years since their births in 1972-1973. We test hypotheses about the predictors of youth unemployment using information about each individual's human capital, social capital, and personal capital. In the human capital domain, lack of high-school qualifications, poor reading skills, low IQ scores, and limited parental resources significantly increased the risk of unemployment. In the social capital domain, growing Icp in a single-parent family, family conflict, and lack of attachment to school also increased the risk of unemployment. In the personal capital domain, children involved in antisocial behavior had an increased risk of unemployment. These predictors of unemployment reached back to early childhood suggesting that they began to shape labor-marker outcomes years before these youths entered the work force. In addition, these effects remained significant after controlling for the duration of education and educational attainment, suggesting that many early personal and family characteristics affect labor-market outcomes, not only because they restrict the accumulation of human capital (e.g., education), but also because they directly affect labor-marker behaviors. Failure to account for prior social, psychological, and economic risk factors may lead to inflated estimates of the effects of unemployment on future outcomes.