How early career choices adjust to economic crises

This project examines how economic crises affect young people’s educational and career choices, and how these decisions influence their long-term labour market outcomes. Focusing on Sweden’s deep recession in the early 1990s—which hit the manufacturing and construction sectors hardest—we study whether youths whose fathers lost their jobs in these sectors were more or less likely to choose career paths related to those industries. We measure these career choices by analysing the upper-secondary tracks that the youths selected, as well as the industries these educational tracks typically lead to in the labour market. We then examine whether these altered career choices affected long-term labour market outcomes, including employment and income. Finally, we seek to explain our results by disentangling several potential mechanisms, such as whether the father’s job loss acts as an informational signal, affects individuals’ networks, or impacts family resources. We use data from the IFAU database, primarily from LISA, the Multi-Generation Register, and the Education Register.