The effect of an early-career involuntary job loss on later life health in Europe

Recent years have witnessed an increase in interest towards the long-term health consequences of early-career job loss and youth unemployment. Relying on detailed retrospective data from the third wave (2008/09) of the Survey of Health, Ageing and Retirement in Europe (SHARE) this paper investigates whether an involuntary job loss in the first 10 years after labour market entry has lasting negative effects on health more than 30 years later. The results show that an early-career involuntary job loss due to a layoff or plant closure increases the probability of fair or poor self-rated health in late life by about 6 percentage points. Moreover, examining the mechanisms behind this relationship, the analysis reveals that the subsequent unemployment risks and employment instability only explain a small share of the total effect. In line with previous studies, these findings highlight the importance of early career experiences for workers’ later life health.