Sources of Displaced Workers' Long-Term Earnings Losses
Upjohn Author ORCID Identifier
Publication Date
1-2018
Series
National Bureau of Economic Research Working Paper 24217
Abstract
We estimate the magnitudes of reduced earnings, work hours, and wage rates of workers displaced during the Great Recession using linked employer-employee panel data from Washington State. Displaced workers’ earnings losses occurred mainly because hourly wage rates dropped at the time of displacement and recovered sluggishly. Lost employer-specific premiums explain only 17 percent of these losses. Fully 70 percent of displaced workers moved to employers paying the same or higher wage premiums than the displacing employers, but these workers nevertheless suffered substantial wage rate losses. Loss of valuable specific worker-employer matches explain more than half of the wage losses.
Publisher
National Bureau of Economic Research
DOI
10.3386/w24217
Published Version
In American Economic Review 110(10): 3231-3266
Issue Date
January 2018, Revised June 2019
Subject Areas
LABOR MARKET ISSUES; Job security and unemployment dynamics; Dislocated workers
Citation
Lachowska, Marta, Alexandre Mas, and Stephen A. Woodbury. 2018. "Sources of Displaced Workers' Long-Term Earnings Losses." National Bureau of Economic Research Working Paper 24217. Cambridge, MA: National Bureau of Economic Research. http://dx.doi.org/10.3386/w24217