The Scarring Effect of First Job Precarity: New Evidence from a Panel Study in Hong Kong

Does entering the labour market via precarious employment have a long-term scarring effect on one’s career? Prior research proposes diverse arguments, but firm conclusions remain elusive. Using panel data from Hong Kong, this study rekindles this debate by revealing the long-lasting effect of first job precarity on workers’ subsequent career prospects. A comprehensive measure of precarious employment is constructed to simultaneously account for employment status, contractual status and occupational status, and random effects models are used to test the scarring effect of first job precarity on subsequent monthly income, job satisfaction and fringe benefits. It is also observed that macroeconomic situations, particularly periods of economic crisis, have a detrimental effect on entry into precarious employment. Importantly, the results show the substantial negative consequences of initial precarious employment, highlighting the adverse impact of economic crises on first job precarity and the subsequent scarring effect on career prospects.