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Did Timing Matter? Life Cycle Differences in Effects of Exposure to the Great Recession

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  • Kevin Rinz

Abstract

Exposure to a recession can have persistent, negative consequences, but does the severity of those consequences depend on when in the life cycle a person is exposed? I estimate the effects of exposure to the Great Recession on employment and earnings outcomes for groups defined by year of birth over the ten years following the beginning of the recession. With the exception of the oldest workers, all groups experience reductions in earnings and employment due to local unemployment rate shocks during the recession. Younger workers experience the largest earnings losses in percent terms (up to 13 percent), in part because recession exposure makes them persistently less likely to work for high-paying employers even as their overall employment recovers more quickly than older workers’. Younger workers also experience reductions in earnings and employment due to changes in local labor market structure associated with the recession. These effects are substantially smaller in magnitude but more persistent than the effects of unemployment rate increases.

Suggested Citation

  • Kevin Rinz, 2019. "Did Timing Matter? Life Cycle Differences in Effects of Exposure to the Great Recession," Working Papers 19-25, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:19-25
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    File URL: https://www2.census.gov/ces/wp/2019/CES-WP-19-25.pdf
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    Cited by:

    1. Garrett Anstreicher, 2020. "Family Formation and the Great Recession," Working Papers 20-42, Center for Economic Studies, U.S. Census Bureau.

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    More about this item

    Keywords

    Great Recession; unemployment; earnings; labor market concentration;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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