Earnings Losses of Displaced Workers

We exploit administrative data combining workers' earnings histories with information about their firms to estimate the magnitude and temporal pattern of displaced workers' earnings losses. We find that high-tenure workers separating from distressed firms suffer long-term losses averaging...

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Bibliographic Details
Published in:The American economic review 1993-09, Vol.83 (4), p.685-709
Main Authors: Jacobson, Louis S., LaLonde, Robert J., Sullivan, Daniel G.
Format: Article
Language:English
Subjects:
Age
Datasets
Employment
Job loss
Manufacturing industries
Men
Quarterly estimates
Separators
Unemployment
Wages
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Summary:We exploit administrative data combining workers' earnings histories with information about their firms to estimate the magnitude and temporal pattern of displaced workers' earnings losses. We find that high-tenure workers separating from distressed firms suffer long-term losses averaging 25 percent per year. In addition, we find that displaced workers' losses: (i) begin mounting before their separations, (ii) depend only slightly on their age and sex, (iii) depend more on local labor-market conditions and their former industries, (iv) are not, however, limited to those in a few sectors, and (v) are large even for those who find new jobs in similar firms.
ISSN:0002-8282