Title:

Long-Term Effects of a Recession at Labor Market Entry in Japan and the United States

Author(s):

Genda, Yuji
Kondo, Ayako
Ohta, Souichi

Date:

2007

Type:

Working papers

Department:

Institute for Social and Economic Research and Policy

Permanent URL:

http://hdl.handle.net/10022/AC:P:9652

Series:

ISERP Working Papers

Part Number:

07-09

Publisher:

Institute for Social and Economic Research and Policy, Columbia University

Publisher Location:

New York

Abstract:

This paper examines effects of entering the labor market during a recession on subsequent earnings and employment for Japanese and American men, using comparable household labor force surveys. Previous analyses focus on search theoretic and implicit-contract arguments, which have their strongest effects on more educated workers. The authors argue that, in a country like Japan which has a dual labor market, there is an additional mechanism that affects mainly less educated workers. Namely, these workers are more likely to be trapped in the secondary sector if they graduate during a recession. We find a persistent, strong negative effect on earnings for less educated Japanese men, in contrast to no long-term effect for less educated American men; also, a substantial part of the effect for less educated Japanese men is attributed to the decreased probability of regular employment. The effect for the more educated group is more or less similar in both countries.

Subject(s):

Economics
Economics, Labor
Labor relations

Item views:

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