The Effects of Non-Employment in Early Work-Life on Subsequent Employment Chances of Individuals in The Netherlands

In this article, the effects of non-employment in early work-life on subsequent employment chances of individuals in the Netherlands are examined. A main concern is whether the experience of non-employment in the beginning of the career (permanently) damages a worker's later employment opportunities (that is, the likelihood of exit out of and re-entry into employment). The empirical analysis is based on five retrospective life-history surveys collected in the Netherlands in the period 1992–2003, with full information on employment histories of individuals. The analytic sample consists of 7,761 respondents, who left education since the 1950s. The results of the empirical analysis first of all show that the duration of non-employment in the first 3 years after leaving education (and not the number of non-employment spells in that period) increases the likelihood of exiting employment in the subsequent time period (up until 15 years after leaving education). This finding holds for both men and women. Second, a negative duration effect of non-employment on the likelihood of re-entering employment after a job loss is found, but for men only. These results imply that non-employment in early work-life indeed has a scarring effect on subsequent employment chances of individuals in the Dutch labour market.