Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/51790 
Year of Publication: 
2010
Series/Report no.: 
IZA Discussion Papers No. 5360
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We estimate the effects of labor market entry conditions on wages for male individuals first entering the Austrian labor market between 1978 and 2000. We find a large negative effect of unfavorable entry conditions on starting wages as well as a sizeable negative long-run effect. Specifically, we estimate that a one percentage point increase in the initial local unemployment rate is associated with an approximate shortfall in lifetime earnings of 6.5%. We also show that bad entry conditions are associated with lower quality of a worker's first job and that initial wage shortfalls associated with bad entry conditions only partially evaporate upon involuntary job change. These and additional findings support the view that initial job assignment, in combination with accumulation of occupation or industry-specific human capital while on this first job, plays a key role in generating the observed wage persistencies.
Subjects: 
initial labor market conditions
endogenous labor market entry
initial job assignment
specific human capital
JEL: 
E3
J2
J3
J6
M5
Document Type: 
Working Paper

Files in This Item:
File
Size
459.42 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.