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Home Publications Does leaving education in a recession have a lasting impact on living standards?

Does leaving education in a recession have a lasting impact on living standards?

Jonathan Cribb, Andrew Hood and Robert Joyce
Report summary

Almost a decade ago, the Great Recession saw increased levels of youth unemployment and particularly large falls in the earnings of young adults. This has led to a further concern about whether having entered the labour market during a recession will have long-lasting negative effects on the living standards of these people. It is important for policymakers to understand the extent to which young adults are persistently affected by the economic conditions in which they first look for a job, in terms of not only their employment and pay, but also more comprehensive measures of their material living standards. This short note summarises the results of new IFS research, which estimates the effects of entering the labour market when the economy is weak. As set out in detail in the full working paper, we use data from the Family Expenditure Survey and the Family Resources Survey spanning the last 40 years (almost 200,000 people) to effectively compare the outcomes of individuals who entered the labour market at similar times but nevertheless faced different initial economic conditions due to sharp swings in the economic cycle.

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IFS Working Paper W17/27
This paper estimates the effects of entering the labour market when the economy is weak on subsequent living standards using consistent long-running household survey data from the UK.
Presentation
Short-term pain, long-term pain? The immediate and lasting impacts of economic downturns on living standards
Presentation
Short-term pain, long-term pain? The immediate and lasting impacts of economic downturns on living standards
Press release
A new report, published today by the Institute for Fiscal Studies (IFS) and funded by the Nuffield Foundation, shows that leaving education when the economy is weak can have lasting effects on your pay and employment – even once the wider economy has returned to normal. However, young adults’ ...