Does the first job really matter? State dependency in employment status in Japan

This paper examines whether the failure to obtain regular full-time employment at the time of graduation has a long-term impact on subsequent employment status. Using micro data from the Japanese General Social Surveys and the job opening ratio (yuko kyujin bairitu) as an instrument for entry-level employment status, I show that the observed correlation between current and entry-level employment status produces a true causal link, which is not attributable to sorting on unobserved aptitude. I also discuss various underlying mechanisms including social institutions and stigmatization. J. Japanese Int. Economies 21 (3) (2007) 379-402.