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Scarring effects: A review of Australian and international literature

Jeff Borland

Australian Journal of Labour Economics: a journal of labour economics and labour relations2020review
AJG 1ABDC B
Weight
0.69

Abstract

Scarring occurs when an adverse experience for a worker – associated with macroeconomic conditions - has negative long-term impacts on their labour market outcomes. For example, a worker who is entering the labour market during a macroeconomic downturn may experience a spell of unemployment or have to take a job for which they are over-qualified – and those experiences then affect the worker’s labour market outcomes in future years. Recent studies find that scarring effects are substantial: for example, the main Australian study on scarring finds that graduates entering the labour market at a time when the youth rate of unemployment rate is 5ppts above average lowers annual earnings of graduates by about 8 per cent at the time of entry and by 3.5 per cent after five years. This article reviews Australian and international evidence on scarring; and provides an overview of the main channels through which scarring occurs.

13 citations

Cite this paper

@article{jeff2020,
  title        = {{Scarring effects: A review of Australian and international literature}},
  author       = {Jeff Borland},
  journal      = {Australian Journal of Labour Economics: a journal of labour economics and labour relations},
  year         = {2020},
}

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Scarring effects: A review of Australian and international literature

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Evidence weight

0.69

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.85 × 0.4 = 0.34
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.