Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/295921 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 16898
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Workers who enter the labor market during recessions experience lasting earnings losses, but the role of non-pay amenities in exacerbating or counteracting these losses remains unknown. Using population-scale data from Germany, we find that labor market entry during recessions generates a 5 percent reduction in earnings cumulated over the first decade of experience. Implementing a revealed-preference estimator of employer quality that aggregates information from the universe of worker moves across employers, we find that 17 percent of recession-induced earnings losses are compensated by non-pay amenities. Purely pecuniary estimates can therefore overstate the welfare costs of labor market entry during recessions.
Subjects: 
earnings inequality
recessions
non-pay amenities
JEL: 
E32
J24
J31
J32
Document Type: 
Working Paper

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