The most recent economic crisis of 2007/2008 has hit young adults hard through severe labor market insecurities and high unemployment rates in many countries. This has raised concerns of persisting disadvantages for a “lost generation”. In particular, there is the concern that young people at the transition from education into employment are vulnerable to high unemployment around them and may suffer negative long-term consequences of economic adversity for their health.

ISS researchers Philipp Lersch, Marita Jacob and Karsten Hank examined whether this concern is warranted in a recently published study. For their analysis, they used data from the German Socio-Economic Panel Study (SOEP), which interviews the same individuals repeatedly for many years. The authors examined how regional variation in federal state-level unemployment rates when individuals left education between 1992 and 2015 in West Germany related to individuals’ self-rated health later on up to age 49.

The authors found that, first, young adults leaving education in federal states with high unemployment have initially better health compared to leaving education in states with low unemployment. This counterintuitive result has been repeatedly found by researchers for other countries. One explanation is that economic downturns may lead to less traffic accidents, less pollution and less work stress. Second, the authors found that individual unemployment when leaving education is associated with initially poorer health, regardless of the state-level unemployment rate. This health disadvantage persists as individuals age. Third, those who were unemployed in a high-unemployment context when leaving education are particularly disadvantaged. Their health declines more over time compared to those from low-unemployment contexts.

Thus, in combination with being unemployed themselves, young people who finish education and who experience high unemployment in their environment similar to the recent economic crisis are likely to suffer from worse health in the long run.