Inequality in the risk of job loss among young and prime-age workers: Can it be explained by human capital or structural factors?

Our aim is to identify the determinants of the gap in the risk of job separation between young and prime-age workers. Using a Oaxaca-Blinder type of decomposition for binary outcomes and data from the Polish Labour Force Survey, we seek to disentangle the question of to what extent age heterogeneity in the risk of job separation is shaped by differences in the composition of young and prime-age workers with respect to their individual and job characteristics, and to what extent it is driven by different risks of job separation associated with those characteristics.

According to our results, differences in the composition of young and prime-age workers and differences in the returns to their characteristics in terms of employment stability contribute to similar degrees to the gap in the job loss risk between young and prime-age workers. Differences in the composition of the workplace characteristics of young and prime-age workers explain a considerable share of the overall gap in the risk of job loss, because young people tend to find less secure jobs than prime-age workers . At the same time, the diverging effects of workplace characteristics appear to narrow rather than widen the gap in job security between young and prime-age workers. In other words, jobs that tend to be precarious do less harm or provide more benefits to young people.

Iga Magda

Assistant Professor at Department of Economics , Warsaw School of Economics

  • Topic of the paper:What makes young people the marginalized labour market group? Evidence from Poland
  • Research interests:Labour economics: labour market policies, unemployment, wages and wage disparities
  • Email:iga.magda@sgh.waw.pl