Recessions have lasting effect on young jobs and pay

Recessions have a lasting impact on the employment and pay of young adults, according to new research.
By The Newsroom
Published 30th Nov 2017, 06:00 BST
Updated 12th Dec 2017, 00:40 BST
Recession can cost young earners up to £1,100 five years after starting workRecession can cost young earners up to £1,100 five years after starting work
Recession can cost young earners up to £1,100 five years after starting work

Wages are “significantly” affected for years after a recession - even if the economy returns to normal, said the Institute of Fiscal Studies.

Its study found that the average negative impact on the pre-tax earnings of young adults five years after leaving education is around £1,100 a year.

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Jonathan Cribb, a senior research economist at the IFS, said: “The direct negative impact of entering the labour market in a recession is to significantly depress pay and employment for the next few years - even if the economy as a whole returns to normal.

“The tax and benefit system provides some protection against this, and a big potential safety net that many young adults have is their parents.

“But for those not living with their parents, the persistent negative effects on pay and employment of starting out in a recession do translate into lower net household incomes and lower spending for several years afterwards.”