| Abstract: This paper studies the dynamics of the scarring effect of youth unemployment
along the business cycle in 12 European countries. On the one hand, we analyse
differences associated to the negative effect of past unemployment experiences in
future labour market status. And, on the other hand, we consider potential stigmatization against prospect young workers, that is, the extent to which employers are
more reluctant to hire individuals with a history of unemployment. Our results are
based on data from the EU-SILC for the period 2004 to 2015 and provide support in
favour of a significant scarring effect of unemployment among youths that is highly
heterogeneous across the countries under analysis and that increased substantially
during the Great Recession. On the contrary, evidence on stigma effects was found
to be rather weak. |
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