To Shape The Future: How Labor Market Entry Conditions Affect Individuals' Long-Run Wage Profiles

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Executive Summary

The authors study the long-run effects of initial labor market conditions on wages for a large sample of male individuals entering the Austrian labor market between 1978 and 2000. They find a robust negative effect of unfavorable entry conditions on starting wages. This initial effect turns out to be quite persistent and even though wages do catch up later on, large effects on lifetime earnings result. They also show that initial labor market conditions have smaller and less persistent effects for blue-collar workers than for white-collar workers.

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