Scarring effects of bad transitions from education to work

The quality of the school-to-work transition sets the conditions for labour market integration, and early negative experiences can have persistent 'scarring effects.' Despite extensive research on specific negative transitions, a comprehensive synthesis is still lacking. This chapter aims to fill this gap by theoretically and empirically reviewing the scarring effects of negative transitions, with a focus on spells of unemployment, overeducation, and employment precarity. First, drawing on sociological and economic perspectives, we examine micro-level supply- and demand-side mechanisms that may trap workers in more disadvantaged working conditions and discuss stratified scarring effects across educational levels and ascribed individual characteristics. Second, adopting a macro-micro-macro framework, we discuss the role of macro-level factors, such as labour market regulations, education systems, and school-to-work linkages, as well as aggregate labour market conditions at labour market entry, in moderating the effects of bad transitions. Furthermore, we provide an up-to-date review of empirical estimates from surveys and experiments on the short- and long-term consequences of insecure working conditions and underutilised skills on labour market trajectories in different contexts and according to individual characteristics. Finally, we suggest potential avenues for future research to address existing shortcomings in the literature.