Long-term effects on youth career of entering the labour market during the Great Recession

In this article, we analyse the long-term effects on youth professional careers of entering the Spanish labour market under adverse economic conditions, using administrative data from the Continuous Sample of Working Histories (CSWH) for the period 2007-2017. We follow a cohort approach and estimate a Weighted OLS specification. Results show that cohorts entering the labour market in a recession face long-term consequences both in terms of wages and employment. For less-educated individuals, we find that the main effect is via employment, even blocking their entry into the labour market. For high-educated individuals, instead, we obtain a long-term penalty in terms of wages as well as a reduction in the days worked. The main contribution of this paper is to provide evidence of the long run impact on youth careers of the Great Recession in a segmented labour market.