After the shocks : Preventing long-term labour market scarring for youth

Jasmine Lee, Owen Brown, and Noah Zon write about the link between immigration and prosperity for the Century Initiative.

A major economic downturn can leave considerable damage on people’s lives. For some, this pain is shortlived, but for others there is a strong risk of lasting harm. Young people, and especially recent graduates, experience distinct challenges during and after downturns that can stay with them in the long term. The immediate effects of economic shocks like recessions include job losses, and reduced hours and wages for young people. Over time, those short-term consequences compound, leaving a lasting impact on career earnings, job opportunities, labour market attachment, and career progression. These lasting consequences, known as “labour market scarring”, can have significant downstream impacts on young people’s well-being, economic inclusion, and capacity to build economic security and wealth.