Economic crashes act like a one-way trap that permanently kicks young people and immigrants out of the workforce.
While we think of recessions and booms as balancing each other out, this study found a vertical asymmetry: marginal groups lose their jobs much faster during downturns than they gain them back during upturns. This creates a structural decline in employment that persists even when the economy 'recovers.'
Structural consequences of cyclical change for marginal group employment
SocArXiv · 84uxy_v2
In Sweden and many other countries, young people and immigrants are facing increasing difficulties in finding employment. We suggest that the decline in employment prospects for marginal groups to a significant extent can be explained by skill upgrading and over-education. In two recent papers focusing on youth and immigrants, respectively, we find support for these hypotheses. The present paper examines how the long-term evolution of youth male employment is linked to cyclical economic change,