What are the Long Run Effects of Entering the Labor Market During a Recession?

Study Context

In the Middle East, youth unemployment regularly ranges from 20 to 30 percent. While the short term impacts of youth unemployment are well studied, less is known about the long-term effects on young people who enter the labor market during periods of high unemployment, especially in developing countries. The central question that Bailey aims to study is: “Do workers who enter the labor market during recessions have worse long-run labor market and marriage market outcomes compared to those who enter during good economic times? If so, why, and how can policy ameliorate these impacts?”

Study Design

This project will examine the effects of entering the labor market during a recession on long-run labor market and marriage market outcomes in Egypt. Bailey will use 4 rounds of data spanning 20 years from the Egyptian Labor Market Survey (ELMPS) to analyze this question. The ELMPS contains detailed modules on current and past employment along with modules on migration, marriage, and childbearing. Between the four rounds of surveys (1998, 2006, 2012, 2018), 10,000 individuals appear in all 4 surveys and all 86,000 individuals surveyed are present across at least 2 rounds of data. The breadth and depth of this dataset provides a promising base from which to study how recessions impact lives over time.

Bailey will use Development Economics Challenge funds to hire research assistants to digitize and translate ELMPS data from prior to 2006 which will inform future research and eventually be made public.

Results and Policy Lessons

Results forthcoming.