Earnings Losses after Non-Employment Increase with Age
AbstractThis paper shows that after older workers experience periods of non-employment, earnings losses increase. Before non-employment, older employees have relatively higher earnings compared to younger employees without employment interruptions. This earnings advantage turns into a strong earnings disadvantage shortly before, and for a long time after, unemployment. Younger people who lose their jobs have a relatively stable, small earnings disadvantage before non-employment and quickly earn more than those without employment interruptions. The earnings effect of returning to the same employer after non-employment suggests that more involuntary work interruptions for older employees better explains the results than the loss of an implicit contract or specific human capital.
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Bibliographic InfoArticle provided by LMU Munich School of Management in its journal Schmalenbach Business Review.
Volume (Year): 64 (2012)
Issue (Month): 1 (January)
Content Validity; Age; Earnings Losses; Non-Employment;
Other versions of this item:
- Zwick, Thomas, 2008. "Earnings Losses After Non-employment Increase With Age," ZEW Discussion Papers 08-041, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
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