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

  • Daniel G. Sullivan
  • Till von Wachter

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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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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