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Earnings losses of displaced workers

Author

Listed:
  • Louis S. Jacobson
  • Robert J. LaLonde
  • Daniel G. Sullivan

Abstract

The 1990-1991 recession has intensified concerns about the consequences of workers' job losses. To estimate the magnitude and temporal pattern of displaced workers' earnings losses, we exploit an unusual administrative data set that includes both employees' quarterly earnings histories and information about their firms. We find that when high-tenure workers separate from distressed firms their long-term losses average 25 percent per year. Further, their losses mount even prior to separation, are not limited to workers in a few industrial sectors, and are substantial even for those who find new jobs in similar firms. This evidence suggests that displaced workers' earnings losses result largely from the loss of some unidentified attribute of the employment relationship.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992. "Earnings losses of displaced workers," Working Paper Series, Macroeconomic Issues 92-28, Federal Reserve Bank of Chicago.
  • Handle: RePEc:fip:fedhma:92-28
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    References listed on IDEAS

    as
    1. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-620, September.
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    6. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    7. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    8. 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.
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    13. Kletzer, Lori Gladstein, 1989. "Returns to Seniority after Permanent Job Loss," American Economic Review, American Economic Association, vol. 79(3), pages 536-543, June.
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    More about this item

    Keywords

    Displaced workers;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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