This paper uses administrative data on quarterly employment and earnings matched to death records to estimate the effects of job displacement on mortality. We find that job displacement leads to a 15-20% increase in death rates during the following 20 years. If such increases were sustained beyond this period, they would imply a loss in life expectancy of about 1.5 years for a worker displaced at age 40. These results are robust to extensive controls for sorting and selection, and are consistent with estimates of the effects of job loss on mortality pooling displaced workers and stayers that are not affected by selective job displacement. To examine the channels through which mass layoffs raise mortality, we exploit the panel nature of our data -- covering over 15 years of earnings -- to analyze the correlation of long-run career outcomes, such as the mean and standard deviation of earnings, with mortality at the individual and group level, something not possible with typical data sets. Our findings suggest that factors correlated with a decrease in mean earnings and a rise in standard deviation of earnings have the potential to explain an important fraction of the effect of a job displacement on mortality.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
13626.
Length: Date of creation: Nov 2007 Date of revision: Handle: RePEc:nbr:nberwo:13626
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Find related papers by JEL classification: I1 - Health, Education, and Welfare - - Health J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Douglas Miller & Christina Paxson, 2001.
"Relative Income, Race, and Mortality,"
Working Papers
269, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
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