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Parental Proximity and Earnings after Job Displacements

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Abstract

Young adults, ages 25 to 35, who live in the same neighborhoods as their parents experience stronger earnings recoveries after a job displacement than those who live farther away. This result is driven by smaller on-impact wage reductions and sharper recoveries in both hours and wages. We show that geographic mobility, different job search durations, housing transfers, and ex-ante differences between individuals are unlikely explanations. Our findings are consistent with a framework in which some individuals living near their parents face a better wage-offer distribution, though we find no direct evidence of parental network effects.

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  • Patrick Coate & Pawel Krolikowski & Mike Zabek, 2017. "Parental Proximity and Earnings after Job Displacements," Working Papers (Old Series) 1722, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:1722
    DOI: 10.26509/frbc-wp-201722
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    Cited by:

    1. Patrick Coate & Pawel Krolikowski & Mike Zabek, 2018. "Parental Assistance after Job Loss," Economic Commentary, Federal Reserve Bank of Cleveland, issue August.
    2. Dicks, Alexander & Levels, Mark & van der Velden, Rolf & Mills, Melinda C., 2022. "How Young Mothers Rely on Kin Networks and Formal Childcare to Avoid Becoming NEET in the Netherlands," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6, pages 1-1.
    3. Stefania Albanesi & Rania Gihleb & Ning Zhang, 2022. "Boomerang College Kids: Unemployment, Job Mismatch and Coresidence," Working Papers 2022-038, Human Capital and Economic Opportunity Working Group.
    4. Mike Zabek, 2024. "Local Ties in Spatial Equilibrium," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(2), pages 287-317, April.
    5. HwaJung Choi & Robert Schoeni & Hongwei Xu & Adriana Reyes & Deena Thomas, 2021. "Proximity to mother over the life course in the United States: Overall patterns and racial differences," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 45(23), pages 769-806.
    6. Gihleb, Rania & Giuntella, Osea & Lonsky, Jakub, 2023. "Dreaming of leaving the nest? Immigration status and the living arrangements of DACAmented," European Economic Review, Elsevier, vol. 156(C).
    7. Haapanen, Mika & Pehkonen, Jaakko & Seppälä, Ville, 2025. "Parental earnings response to children's job loss: Evidence from Finland," Labour Economics, Elsevier, vol. 94(C).
    8. Katherine Lim & Mike Zabek, 2024. "Women’s Labor Force Exits During COVID-19: Differences by Motherhood, Race, and Ethnicity," Journal of Family and Economic Issues, Springer, vol. 45(3), pages 504-527, September.
    9. Carolina Aragao & Aida Villanueva, 2021. "How do mothers work? Kin coresidence and mothers' work in Latin America," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 45(30), pages 917-956.
    10. Chan, Sewin & O'Regan, Katherine & You, Wei, 2021. "Migration choices of the boomerang generation: Does returning home dampen labor market adjustment?," Journal of Housing Economics, Elsevier, vol. 53(C).

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    Keywords

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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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