Why Don’t Firms Hire Young Workers During Recessions
Bibliographic Data
| ID | 9703644 |
|---|---|
| Authors | Eliza Forsythe (0000-0001-6052-1754, University of Illinois Urbana-Champaign), Elizabeth Carla Forsythe (corresponding author) |
| Year | 2022 |
| Volume | 132 |
| Issue | 645 |
| Pages | 1765-1789 |
| Publication date | 2022-06-17 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (PUBLISHER • GB) |
| DOI | 10.1093/ej/ueab096 |
| OpenAlex | W2796473824 |
| Language | EN |
| Citations received | 6 |
| References cited | 26 |
Recessions are known to be particularly damaging to young workers’ employment outcomes. I find that during recessions the hiring rate falls faster for young workers than for more experienced workers. I show that this cannot be explained by the composition of jobs or workers’ labour supply decisions, and I conclude that firms preferentially hire experienced workers during periods of high unemployment. I develop a new model of cyclical upgrading that relaxes the classic assumptions of exogenous firm size and rigid wages. I show that this model predicts larger log wage decreases during recessions for young workers than for experienced workers, a prediction that is supported by the data. I conclude that policymakers should consider extending unemployment insurance coverage during recessions to new labour market entrants
Business · Economics · Labour economics · Recession · Employment and Welfare Studies · Firm Innovation and Growth · Labor market dynamics and wage inequality
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Upskilling
Did the Job Ladder Fail after the Great Recession
Who Suffers During Recessions
| Unique citing works | 6 |
|---|---|
| Citations per year | 1 |
| Citation span | 2020 - 2026 (7) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 6 |