We invite you to a FAIR Seminar with Martin Nybom. Martin is an Associate Professor (docent) at IFAU in Uppsala, a research fellow at IZA and the UCLS, Uppsala University, and associated researcher at SOFI, Stockholm University. His fields of interest are labor economics and applied micro, but especially topics such as inequality, intergenerational mobility, and the labor market effects of skills and education.
Title:The Long Arm of Recessions: Evidence from Sweden’s Great Economic Crisis
Abstract:
We study the major Swedish economic crisis of the early 1990s and examine how exposure to a recessionary labor market affects workers long term. By comparing workers from heavily and less affected areas, we find that the local recession shocks caused lower earnings and employment for affected individuals, lasting up to 25 years after the start of the crisis. The earnings effects are mainly due to lower employment and fewer hours worked, conditional on being employed. We then study worker adjustments. Contrary to basic theory, there is only a weak response in terms of internal migration, which is likely a combined effect of a generous social safety net and housing market dynamics. More exposed workers increase their take-up of UI and social benefits through the 1990s, but over time transition into disability insurance.