Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/54911
Authors: 
Nilsen, Øivind Anti
Reiso, Katrine Holm
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Labour Markets 3675
Abstract: 
Using Norwegian individual register data of young workers, from the period 1986-2008, we analyse whether there are large and persistent negative relationships between unemployment and the risk of repeated unemployment and being out of labour force. A nearest-neighbour propensity score matching method is applied to make the treatment group (the unemployed) and the control group (the employed) as similar as possible. By tracking workers over a 10-year follow-up period, we find that unemployment has a negative effect on later labour market attachment. This is consistent with existing findings in the literature. The negative effects decrease over time. Using the bounding approach proposed by Rosenbaum (2002) to analyse the importance of unobserved variables, our results indicate that a relatively high level of unobserved selection bias could be present in the data before changing the inference. Thus, unemployment leaves young workers with long-term scars.
Subjects: 
unemployment persistency
scarring
matching technique
JEL: 
J64
J65
C23
Document Type: 
Working Paper

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