Young people’s labour market transitions: the role of early experiences

We investigate young people's labour market transitions beyond compulsory schooling and, in particular, the dynamic effects of prior experience. We use a UK longitudinal survey to model transitions between four states: employment, unemployment, education and a residual category made up of those neither in education nor economically active.  The results provide richer insights into the nature of duration dependence, new evidence on the impact of prior experience and show the importance of distinguishing between unemployment and inactivity among non-students.  A simulation exercise illustrates the evaluation potential of the model and provides some clues for the design of interventions aimed at improving young people's employment prospects.  Applied to the case of an idealised work experience programme, the simulation suggests temporary, but not lasting, effects.