Long-term effects of labor market conditions in youth

This dissertation explores the effects of aggregate labor market conditions experienced in youth on individuals' lives in the long run.;The first chapter focuses on the effects of labor market conditions on marriage formations in the United States. Slack labor market conditions for women relative to men increase marriage rates for young women. One concern is that this increase may be from marginal marriages due to some females lowering their reservation match quality, and so lead to future divorces and possibly to increases in female headship and poverty. I examine the long-term consequences of such marriages using data from the Survey of Income and Program Participation and the Panel Study of Income Dynamics. I find that the marriages induced by relatively poor economic conditions for women reflect shifts in the timing of marriage among young women who would eventually marry anyway. Labor market conditions at age 18--20 do not affect the fraction of women who will marry by age 30. Further, labor market conditions at marriage are uncorrelated with the probability of divorce or with spouses' characteristics, and marrying young in response to labor market shocks does not significantly affect a woman's fertility or labor supply. These findings are consistent with a model in which economic conditions affect women's search intensity without affecting their reservation match quality.;The second chapter examines effects of entering the labor market during a recession on subsequent employment and earnings for Japanese and American men, using comparable household labor force surveys. The unemployment rate at graduation has persistent negative effects for less educated Japanese men, in contrast to temporary effects for less educated American men. The school-based hiring system and the dismissal regulation prolong the initial loss of employment opportunities for less educated Japanese men. The effect on earnings for more educated groups is also stronger in Japan, although the difference between the two countries is smaller than for less educated groups.;The third chapter examines whether the failure to obtain regular full-time employment at the time of graduation has a long-term impact on subsequent employment status. Using micro data from the Japanese General Social Surveys and the job opening ratio (yuko kyujin bairitu) as an instrument for entry-level employment status, I show that the observed correlation between current and entry-level employment status produces a true causal link, which is not attributable to sorting on unobserved aptitude. I also discuss various underlying mechanisms including social institutions and stigmatization.