Comparing long-term scarring effects of unemployment across countries: the impact of graduating during an economic downturn

This chapter investigates the extent to which graduating in a bad economy scars the careers of youth cohorts in terms of increased future unemployment and over-representation in fixed-term and involuntary part-time work. Using data from the European Union’s Labour Force Survey, we explore these dynamics of scarring from a cross-country comparative perspective, focusing on the United Kingdom, Germany, Switzerland, Spain and Finland. These countries make for interesting cases because they differ remarkably on institutional and economic dimensions. Overall, we find that bad luck in the timing of labour market entry can scar future careers, even over the long run. Manifold factors might explain the observed variation in scarring effects across different institutional settings. A sound conceptualization of the institutional framing of long-term scarring effects requires a well-established micro theory of these effects’ behavioural foundations, regarding both employers and jobseekers or workers