Young workers’ professional experience and access to high-skill jobs

The implications of on-the-job search and learning-by-doing of young workers are studied in a search-matching model. The labor market is segmented in two submarkets: that of beginning workers earning minimum wage, and that of experienced workers offering higher wages. After a long enough employment spell, beginners can search for a better paid job in the experienced submarket. Unemployment benefits does not always penalize employment due to a feedback effect of the beginners’ submarket. The minimum wage penalizes high-skill employment by reducing the number of on-the-job searchers applying for the experienced submarket.