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Jobless spells and re-employment wages

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  • Stephen Seninger
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    Abstract

    Many studies of job loss attribute the earnings losses associated with layoffs to the loss of job, occupation, and industry-specific human capital. This paper estimates the effect of jobless spells on post-layoff wages using data from the 1984 Panel of Survey on Income Participation for a sample of adult, white male workers who were permanently laid off between 1974 and 1984. The estimated impact of jobless spells on starting wages and survey date wages, several years after re-employment, are controlled for separations, layoffs, and quits and for individual and job characteristics. The estimates show that jobless spell durations reduce starting wages. Wage growth in the new job is lower for workers who experience long spell durations, a result that suggests acceptance of jobs which are poor matches compared to other workers who spend less time out of work following a layoff. The findings support labour force policies which minimize the amount of time a person is out of work.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036849700000008
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 29 (1997)
    Issue (Month): 9 ()
    Pages: 1169-1177

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    Handle: RePEc:taf:applec:v:29:y:1997:i:9:p:1169-1177

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    1. Ruhm, Christopher J, 1994. "Advance Notice, Job Search, and Postdisplacement Earnings," Journal of Labor Economics, University of Chicago Press, vol. 12(1), pages 1-28, January.
    2. William J. Carrington, 1993. "Wage Losses for Displaced Workers: Is It Really the Firm That Matters?," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 435-462.
    3. Ann P. Bartel & George J. Borjas, 1981. "Wage Growth and Job Turnover: An Empirical Analysis," NBER Chapters, in: Studies in Labor Markets, pages 65-90 National Bureau of Economic Research, Inc.
    4. Jacob Mincer, 1986. "Wage Changes in Job Changes," NBER Working Papers 1907, National Bureau of Economic Research, Inc.
    5. Jacob Mincer & Boyan Jovanovic, 1981. "Labor Mobility and Wages," NBER Chapters, in: Studies in Labor Markets, pages 21-64 National Bureau of Economic Research, Inc.
    6. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    7. Gottschalk, Peter & Maloney, Tim, 1985. "Involuntary Terminations, Unemployment, and Job Matching: A Test of Job Search Theory," Journal of Labor Economics, University of Chicago Press, vol. 3(2), pages 109-23, April.
    8. Dale Mortensen, 1984. "Job Search and Labor Market Analysis," Discussion Papers 594, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    9. Addison, John T & Portugal, Pedro, 1989. "Job Displacement, Relative Wage Changes, and Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 281-302, July.
    10. Lin, Tsai-Fen & Schmidt, Peter, 1984. "A Test of the Tobit Specification against an Alternative Suggested by Cragg," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 174-77, February.
    11. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-55, June.
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    Cited by:
    1. Adams, John & Greig, Malcolm & McQuaid, Ronald W., 1999. "Mismatch and unemployment in local labour markets," ERSA conference papers ersa99pa027, European Regional Science Association.
    2. Garcia Perez, Jose Ignacio & Rebollo Sanz, Yolanda, 2005. "Wage changes through job mobility in Europe: A multinomial endogenous switching approach," Labour Economics, Elsevier, vol. 12(4), pages 531-555, August.

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