Finding a job after unemployment - education as a moderator of unemployment scarring in Norway and German-speaking Switzerland

Abstract

Using data collected with a factorial survey experiment in Norway and Switzerland, we analyze how employers react to unemployment spells when screening job applications. Our focus is on whether unemployment scarring varies depending on the applicants' level of education and the duration and timing of the unemployment spell. We find unemployment scars of similar size in the two countries. Interestingly, education moderates the strength of unemployment scarring: in the Swiss context, graduates from vocational education and training (VET) programs are the most severely affected by unemployment, even years after regaining employment; this is not the case in Norway. We contribute to the unemployment scarring literature and to comparative scholarship on school-to-work transitions by exposing a trade-off of dual VET systems, which are known to provide a safety net from unemployment. Our findings show that these same systems can cause scars that are particularly long-lasting to VET graduates who fall into unemployment.