Economica Using UK data, the study reveals unemployment between ages 18-20 results in a 1.2% yearly permanent income drop. This “scar effect” lessens at ages 21-23 and vanishes thereafter. The impact is harshest for those at the lower end of the ability spectrum.
We show that real wages decline from the Boomer generation onwards, over the life course. Further analysis shows that this is true for almost all groups, at all income levels.