[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/5343.html
   My bibliography  Save this paper

Long-Term Effects of Job Displacement: Evidence from the Panel Study of Income Dynamics

Author

Listed:
  • Ann Huff Stevens
Abstract
This paper measures the long-term wage and earnings losses of workers who lose jobs due to plant closings and layoffs, using a fixed-effects estimator to control for unobserved worker characteristics and longitudinal data from the Panel Study of Income Dynamics. The results show large and persistent effects of displacement on average, with earnings and wages falling by 25 and 12 percent in the year after job loss. Six or more years later, earnings and wages remain reduced by approximately nine percent. Multiple job losses are responsible for much of this persistence. Those workers who avoid subsequent displacements experience more rapid recovery, with earnings and wage reductions of one and four percent six or more years after displacement. These multiple job losses are not heavily concentrated among any identifiable group of workers, but instead affect the recovery patterns of workers with a variety of characteristics.

Suggested Citation

  • Ann Huff Stevens, 1995. "Long-Term Effects of Job Displacement: Evidence from the Panel Study of Income Dynamics," NBER Working Papers 5343, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5343
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w5343.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    2. William J. Carrington, 1993. "Wage Losses for Displaced Workers: Is It Really the Firm That Matters?," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 435-462.
    3. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-324, March.
    4. Blanchflower, David G, 1991. "Fear, Unemployment and Pay Flexibility," Economic Journal, Royal Economic Society, vol. 101(406), pages 483-496, May.
    5. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 437-459.
    6. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-380, October.
    7. Daniel S. Hamermesh, 1987. "What Do We Know About Worker Displacement in the U.S.?," NBER Working Papers 2402, National Bureau of Economic Research, Inc.
    8. Joseph Altonji & R. Shakotko, 1985. "Do Wages Rise with Job Seniority?," Working Papers 567, Princeton University, Department of Economics, Industrial Relations Section..
    9. Kletzer, Lori Gladstein, 1989. "Returns to Seniority after Permanent Job Loss," American Economic Review, American Economic Association, vol. 79(3), pages 536-543, June.
    10. repec:fth:prinin:187 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Finnie, Ross, 2006. "International Mobility: Patterns of Exit and Return of Canadians, 1982 to 2003," Analytical Studies Branch Research Paper Series 2006288e, Statistics Canada, Analytical Studies Branch.
    2. Batchelder Lily L. & Goldberg Fred T., 2008. "Reforming Tax Incentives Into Uniform Refundable Tax Credits," Basic Income Studies, De Gruyter, vol. 2(2), pages 1-11, January.
    3. Paul Attewell, 1999. "The Impact of Family on Job Displacement and Recovery," The ANNALS of the American Academy of Political and Social Science, , vol. 562(1), pages 66-82, March.
    4. Lilia Costabile, 2002. "Aspetti economici del "Libro Bianco del Ministero del Lavoro"," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2002(77).
    5. Robert F. Schoeni & Michael Dardia, 1997. "Earnings Losses of Displaced Workers in the 1990s," JCPR Working Papers 8, Northwestern University/University of Chicago Joint Center for Poverty Research.
    6. S. Elif Filiz, 2016. "Mothers’ Involuntary Job Loss and Children’s Academic Achievement," Journal of Labor Research, Springer, vol. 37(1), pages 98-127, March.
    7. Finnie, Ross, 2006. "Mobilite internationale : donnees sur les taux de sortie et de retour des Canadiens, 1982 a 2003," Direction des études analytiques : documents de recherche 2006288f, Statistics Canada, Direction des études analytiques.
    8. David S. Kaplan & Raymond Robertson & Gabriel Martínez González, 2005. "What Happens to Wages after Displacement?," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 197-242, January.
    9. Morse, Lawrence B., 2005. "After a shutdown: a case study of a closed textile mill," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(3), pages 401-415, May.
    10. Julie L. Hotchkiss & M. Melinda Pitts & John C. Robertson, 2004. "Wage gains among job changers across the business cycle: insight from state administrative data," FRB Atlanta Working Paper 2004-19, Federal Reserve Bank of Atlanta.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carneiro, Anabela & Portugal, Pedro, 2006. "Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set," IZA Discussion Papers 2289, Institute of Labor Economics (IZA).
    2. Mattia Filomena, 2021. "Unemployment Scarring Effects: A Symposium On Empirical Literature," Working Papers 453, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    3. Arnaud Lefranc, 2002. "Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United-States," THEMA Working Papers 2002-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    4. Joseph G. Altonji & Nicolas Williams, 2005. "Do Wages Rise with Job Seniority? A Reassessment," ILR Review, Cornell University, ILR School, vol. 58(3), pages 370-397, April.
    5. Burda, Michael C. & Mertens, Antje, 2001. "Estimating wage losses of displaced workers in Germany," Labour Economics, Elsevier, vol. 8(1), pages 15-41, January.
    6. Stevens, Ann Huff, 1997. "Persistent Effects of Job Displacement: The Importance of Multiple Job Losses," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 165-188, January.
    7. William J. Carrington & Bruce Fallick, 2017. "Why Do Earnings Fall with Job Displacement?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 688-722, October.
    8. Daniel G. Sullivan & Till von Wachter, 2006. "Mortality, mass-layoffs, and career outcomes: an analysis using administrative data," Working Paper Series WP-06-21, Federal Reserve Bank of Chicago.
    9. Joseph G. Altonji & Anthony A. Smith Jr. & Ivan Vidangos, 2013. "Modeling Earnings Dynamics," Econometrica, Econometric Society, vol. 81(4), pages 1395-1454, July.
    10. William J. Carrington & Bruce Fallick, 2014. "Why Do Earnings Fall with Job Displacement?," Working Papers (Old Series) 1405, Federal Reserve Bank of Cleveland.
    11. Nahum Biger & Steven Plaut, 2000. "Trade Secrets, Firm-Specific Human Capital, and Optimal Contracting," European Journal of Law and Economics, Springer, vol. 9(1), pages 51-73, January.
    12. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    13. Neffke, Frank & Nedelkoska, Ljubica & Wiederhold, Simon, 2024. "Skill mismatch and the costs of job displacement," Research Policy, Elsevier, vol. 53(2).
    14. Vilhuber, Lars, 2001. "La spécificité de la formation en milieu de travail : un survol des contributions théoriques et empiriques récentes," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(1), pages 133-167, mars.
    15. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    16. den Haan, Wouter J. & Ramey, Garey & Watson, Joel, 2000. "Job destruction and the experiences of displaced workers," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 87-128, June.
    17. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
    18. Oliver Ruf, 2008. "Effects of Firm Size and Business Cycle on Earning Losses of Displaced Workers," IEW - Working Papers 366, Institute for Empirical Research in Economics - University of Zurich.
    19. Jaap H. Abbring & Gerard J. van den Berg & Pieter A. Gautier & A. Gijsbert C. van Lomwel & Jan C. van Ours & Christopher J. Ruhm, 1998. "Displaced Workers in the United States and the Netherlands," Tinbergen Institute Discussion Papers 98-084/3, Tinbergen Institute.
    20. J. Meekes & W.H.J. Hassink, 2016. "The role of the housing market in workers’ resilience to job displacement after firm bankruptcy," Working Papers 16-10, Utrecht School of Economics.

    More about this item

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5343. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.