Labor market entries and early careers in the United States of America, 1984-2002: increasing employment instability among young people?

Abstract

"In this working paper, we analyze the labor market entries and the subsequent early careers of young people in the United States of America. Using data from the Panel Study of Income Dynamics, we study school leavers aged 16 to 35 longitudinally between 1984 and 2002. Our main research questions regard the consequences of increasing flexibility demands for youth across the past decades: we examine whether the initial phase of working life has become more difficult for young US Americans and whether certain social groups face a greater disadvantage to find a foothold on the job market. We study the duration between leaving education and finding first employment as well as of the job quality of the labor market entry position. The quality is assessed, first, by the risk of starting the career in a precarious stopgap job and, second, by the probability of being overqualified for the respective position. We observe early career developments regarding the chances of moving out of such unfavorable stopgap jobs and the upward and downward mobility in the first five years of employment. Our findings suggest that it has become more difficult for school leavers to find first employment in times of increasing flexibility demands; however, the job quality as well as the subsequent career mobility depend more on the general economic conditions that school graduates face when they leave the educational system. Moreover, our results indicate persisting inequality patterns for the US: young women have greater difficulties to enter the labor market and find a well-paid job than young men do. Although less pronounced, notable disadvantages for non-white minorities could also be identified. However, educational attainment plays the most discriminating role of the last decades: while a high school degree has lost much of its value, holding a tertiary degree has become the strongest predictor for early labor market success." (author's abstract)