Youth survival in the labour market: Employment scarring in three transition economies

The aim of this study is to examine whether the prevalent and fairly long unemployment spell of young Macedonians, Serbians and Montenegrins early in their career has negative effects on their subsequent labour-market performance: the so-called employment scarring. We first model unemployment spell as a function of individual and household characteristics and work attitudes and preferences using a discrete-time duration method. Then, we estimate the survival probabilities to examine the potential existence of employment scarring. The results provide some evidence for the potential presence of employment scarring in the three countries. The scars are largest in Serbia for all durations of the unemployment spell followed by Macedonia; they are weakest in Montenegro.