The long arm of recessions: Evidence from Sweden's great economic crisis

This project studies the long-term individual effects of the major economic crisis in the early 1990s in Sweden. We particularly focus on differences in the magnitude of the crisis between different local labour markets within Sweden, as well as how workers in different locations were affected over time. A long follow-up period allows us to examine labour market outcomes, social benefits, and pension entry up to 25 years after the onset of the crisis. We also study how workers responded to the crisis in terms of whether individuals moved to other parts of the country, changed employers and/or industries, as well as education and retraining.

We use data from the IFAU database on individuals’ labour market outcomes, such as wages, labour income, employment, industry affiliation, and occupation. We also use the multi-generation register to link families, as well as data on place of residence and workplace, and the geographical affiliation of the workplace. To create indices of how the crises affected different local labour markets, we can use aggregated employment changes at the local level, as well as such employment changes for specific groups based on educational level.