The class of 1981: the effects of early career unemployment on subsequent unemployment experiences

We examine whether or not unemployment early in an individual's career influences her later employment prospects. We use six years of the Labour Force Survey (LFS) to create pseudo-cohorts and exploit cross-cohort variation in unemployment at school-leaving age to identify this. We find heterogeneous responses: for the unskilled, there is evidence of an enduring adverse effect; for the more skilled, there is a small beneficial effect. (C) 2003 Elsevier Science B.V. All rights reserved.