Mallorca study: 2008 job start costs up to 12% in pay

Up to 12% of a working life’s earnings is at stake: people who entered Spain’s job market during the 2008 crisis may carry the cost for decades. A study by the University of the Balearic Islands on Mallorca, Spain, and Carlos III University examined how the downturn shaped young people’s careers across Spain.

Who faces the biggest loss

The researchers estimate that men with the least education who started work in 2008 were hit hardest. Their lifetime earnings could be about 12% lower than those of a comparable group who began their careers when the economy was doing well. The estimated loss is around 9% for people with secondary education and 8% for university graduates.

Why the gap lasts

Young people often begin on temporary contracts, which leave them more exposed to losing their jobs in a recession. Time out of work then means less experience and fewer chances to develop skills. The researchers say that early setback can still affect earnings long after the economy recovers.

The team used Spanish Social Security records covering millions of careers to estimate the longer-term effect. It found that the COVID-19 pandemic had a much smaller impact than the 2008 crisis, chiefly because the job market recovered faster. Researcher Ismael Gálvez says helping young people into work during recessions matters if they are not to carry the consequences throughout their careers. The findings cover Spain as a whole, not Mallorca alone.

Topics: Social affairs · Jobs & labour · Politics

Source: Europa Press / Mallorca.com