Human Capital Over the Life Cycle

Human Capital Over the Life Cycle

A European Perspective

Edited by Catherine Sofer

Human Capital Over the Life Cycle synthesises comparative research on the processes of human capital formation in the areas of education and training in Europe, in relation to the labour market. The book proposes that one of the most important challenges faced by Europe today is to understand the link between education and training on the one hand and economic and social inequality on the other. The authors focus the analysis on three main aspects of the links between education and social inequality: educational inequality, differences in access to labour markets and differences in lifelong earnings and training.

Chapter 5: Early career experiences and later career success: an international comparison

David Margolis, Erik Plug, Véronique Simonnet and Lars Vilhuber

Subjects: economics and finance, economics of education, labour economics, education, economics of education

Extract

David Margolis, Erik Plug, Véronique Simonnet and Lars Vilhuber 1. INTRODUCTION This chapter represents an attempt to untangle the links between the early career experiences of young people in the labour market and their labour market success or failure later in life. Although the subject of early-career experiences, such as ‘excessive’ job mobility or taking a long time to find a first job, has already been treated in the literature,1 very little attention has been given to the effects at a much longer term (that is, at least five years after school leaving) of these experiences. Most of these studies focus on a single measure of early career experiences and consider the effects from a short-term perspective. Furthermore, these studies tend to consider only one output measure, typically log hourly wages. We approach this topic from two different perspectives. First, we use a large set of measures of early career experiences in an attempt to control for the omitted variable bias that has made interpretation of many previous results risky and we consider a variety of different measures of later career success. Second, we use long (at least 10-year) panel data sets available in the United States, France, Germany and the Netherlands. As the countries have vastly differing institutions, we can see if workers in different labour markets are treated in the same manner when they have similar early career experiences. This chapter is organized as follows. Section 2 provides some very brief theoretical foundations for the analyses...

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