Document Abstract

Growing pains: the impact of leaving education during a recession on earnings and employment

Looks at the fortunes of those who left education between 2008 and 2011, entering the labour market in the aftermath of the 2008-09 recession. Estimates how severe an impact the downturn had, how long-lasting these effects were, and compares this recession with previous ones. Finds that people starting their careers in the midst of a downturn experience a reduction in real hourly pay after leaving education. Determines that, for those with lower levels of education, the chance of being in work falls by over 20%, while for graduates the chance of being in a low-paying occupation rises. Establishes that, in the recent downturn, there was a more pronounced rise in people working in lower-paid occupations, and the impact on pay was more enduring. Notes, however, that youth unemployment did not rise as high as in the early 1990s, and came down much faster. Suggests that the cohort that graduated in the aftermath of the financial crisis suffered higher unemployment and poorer job prospects than their slightly younger counterparts. Concludes that, although unemployment still blights the early careers of many young people – particularly those with lower levels of education – more needs to be done to support those who, although avoiding unemployment, have had their earnings trajectories and job prospects damaged by time spent in low-paying work.


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Clarke, Stephen
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Resolution Foundation

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