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Mortality, mass-layoffs, and career outcomes: an analysis using administrative data

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  • Daniel G. Sullivan
  • Till von Wachter

Abstract

Seemingly short-term labor market shocks, such as job displacements, can have persistent effects on workers’ earnings, employment, job stability, consumption, and access to health insurance. A long literature suggests such changes in workers’ socioeconomic conditions can have potentially important effects on health outcomes, but existing studies associating job loss to health status face several problems of measurement and identification. This paper uses a large longitudinal administrative data set of quarterly earnings and employer records matched to information on individual mortality outcomes to estimate the long-term effect of a job loss during a mass layoff on mortality. ; We find that a job loss leads to a 15-20% increase in the probability of dying in the 20 years following a job loss. The initial and the long-run responses are particular pronounced. To examine the channels of the mass layoff effect, we exploit the panel nature of our data – covering over 15 years of earnings – to analyze the correlation of long-run career conditions, such as the average and the variance of earnings, with mortality, something not possible with typical data sets. A lasting decrease in earnings and a rise in earnings instability due to mass layoffs have the potential to explain a significant fraction of the effect of a job loss on mortality.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-06-21.

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Date of creation: 2006
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Handle: RePEc:fip:fedhwp:wp-06-21

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Keywords: Downsizing of organizations ; Displaced workers ; Job security;

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References

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Citations

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Cited by:
  1. Kevin F. Hallock, 2009. "Job Loss and the Fraying of the Implicit Employment Contract," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 69-93, Fall.
  2. David R. Howell & Miriam Rehm, 2009. "Unemployment Compensation and High European Unemployment: A Reassessment with New Benefit Indicators," Working Papers wp201, Political Economy Research Institute, University of Massachusetts at Amherst.
  3. Douglas L. Miller & Marianne E. Page & Ann Huff Stevens & Mateusz Filipski, 2009. "Why Are Recessions Good for Your Health?," American Economic Review, American Economic Association, vol. 99(2), pages 122-27, May.
  4. He, Hui & Huang, Kevin X. D. & Hung, Sheng-Ti, 2014. "Are Recessions Good for Your Health? When Ruhm Meets GHH," Dynare Working Papers 31, CEPREMAP.
  5. Yolanda K. Kodrzycki, 2007. "Using unexpected recalls to examine the long-term earnings effects of job displacement," Working Papers 07-2, Federal Reserve Bank of Boston.
  6. Andreas Kuhn & Rafael Lalive & Josef Zweimüller, 2009. "The Public Health Costs of Job Loss," NRN working papers 2009-13, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  7. Benjamin J. Keys, 2010. "The credit market consequences of job displacement," Finance and Economics Discussion Series 2010-24, Board of Governors of the Federal Reserve System (U.S.).
  8. David M. Cutler & Adriana Lleras-Muney & Tom Vogl, 2008. "Socioeconomic Status and Health: Dimensions and Mechanisms," NBER Working Papers 14333, National Bureau of Economic Research, Inc.
  9. Michèle A. Weynandt, 2014. "Selective Firing and Lemons," NRN working papers 2014-05, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.

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