The wounds that do not heal: the life-time scar of youth unemployment

Gianni De Fraja, Sara Lemos, James Rockey

Research output: Contribution to journalArticlepeer-review


This paper uses UK administrative data to study the long-term effects of unemployment on earnings. It is the first paper to pinpoint accurately the relative importance of the timing of employment shocks within workers’ lives. We find a strong effect of events in the first few years after entry into the labour market: each month of unemployment between ages 18 and 20 causes a permanent income loss of 1.2% per year. This scar effect of youth unemployment is lower when it happens when the worker’s age is between 21 and 23, and it disappears altogether in the next three-year age period. The scar effect is most severe for individuals at the lower end of the ability distribution.
Original languageEnglish
Pages (from-to)896-941
Number of pages46
Issue number352
Early online date4 Aug 2021
Publication statusPublished - Oct 2021

Bibliographical note

Funding Information:
We would like to thank Martin Foreaux-Koppensteiner, Andrea Ichino, Jesse Matheson, Giovanni Pica, Till von Wachter, the editor Steve Machin, three anonymous referees and seminar participants at CHERE UTS Sydney, Leicester, UNNC Ningbo, York, and the ECB labour market conference, Frankfurt.

Publisher Copyright:
© 2021 The London School of Economics and Political Science

ASJC Scopus subject areas

  • Economics and Econometrics


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