The Long-Term Costs of Job Displacement for Young Adult Workers

Using NLSY data, the authors estimate the long-term costs of job displacement for young adults. Earnings and wage losses were large for the first three years following displacement. Compared to earnings losses found by other studies for more mature workers, however, earnings losses for these young adults were short-lived, with differences between observed and expected earnings narrowing considerably five years after job loss. At that point, the shortfall in annual earnings (relative to what would have been expected absent job loss) was 9% for men and 12.5% for women, and the shortfall in hourly wages was 21.2% for men. Young workers also apparently differ from more established workers in the composition of total earnings losses: for older workers, total losses largely represent actual, immediate earnings losses, whereas for young workers the loss of opportunities for rapid earnings growth is more important.

Download Full-text

Job Displacement

The Journal of Economic Perspectives ◽

10.1257/jep.12.1.115 ◽

1998 ◽

Vol 12 (1) ◽

pp. 115-136 ◽

Cited By ~ 222

Author(s):

Lori G Kletzer

Keyword(s):

Job Loss ◽

Training Programs ◽

White Collar ◽

Job Displacement ◽

The Past ◽

Earnings Losses ◽

Specific Human Capital ◽

College Educated ◽

And Training

The past decade and a half has seen tremendous research growth in the area of job displacement. This paper discusses the state of knowledge on the issues and questions of job loss. The 1984-96 Displaced Worker Surveys are used to describe how the characteristics of displacement are changing to include more college educated, white collar, and nonmanufacturing workers. For many workers, the long-term earnings losses following displacement are large due to the loss of firm-specific human capital. More research is needed on the questions of the causes of job displacement and on the efficacy of employment and training programs.

Download Full-text

Parental Proximity and the Earnings Consequences of Job Loss

Economic Commentary (Federal Reserve Bank of Cleveland) ◽

10.26509/frbc-ec-201703 ◽

2017 ◽

pp. 1-6

Author(s):

Patrick Coate ◽

Pawel M. Krolikowski ◽

Mike Zabek

Keyword(s):

Young Adults ◽

Older Workers ◽

Job Loss ◽

Job Displacement ◽

Hours Worked ◽

Elderly Parents ◽

Positive Effect

We find post-job-loss earnings recovery is faster for young adults who live near their parents than for young adults who live farther away. This positive effect diminishes gradually as the distance to one's parents increases. Most of the effect is driven by higher wages after job displacement, not by differences in the number of hours worked. The effect is not present for older workers, who may be caring for elderly parents.

Download Full-text

Geographic Mobility and the Costs of Job Loss

The B E Journal of Economic Analysis & Policy ◽

10.1515/bejeap-2014-0131 ◽

2015 ◽

Vol 15 (4) ◽

pp. 1793-1829 ◽

Cited By ~ 4

Author(s):

Nicholas A. Jolly

Keyword(s):

Job Loss ◽

Panel Study ◽

Displaced Workers ◽

Early Years ◽

Geographic Mobility ◽

Lower Probability ◽

Income Dynamics ◽

Earnings Losses ◽

Loss Experience

Abstract This paper uses data from the 1968 through 1997 survey waves of the Panel Study of Income Dynamics to analyze how the long-term costs of job loss vary by a worker’s post-displacement migration status. Results from the analysis show that those individuals who move within the first 2 years after a job loss experience lower earnings losses, lower reductions in hours worked, and smaller increases in time unemployed when compared to a group of displaced workers who are not geographically mobile during the early years following this life event. Workers who move within the first 2 years after displacement face a lower probability of homeownership when compared to their non-mobile counterparts. However, this lower probability is short-lived.

Download Full-text

Measuring the True Impact of Job Loss on Future Earnings

Economic Commentary (Federal Reserve Bank of Cleveland) ◽

10.26509/frbc-ec-201711 ◽

2017 ◽

pp. 1-4

Author(s):

Pawel M. Krolikowski

Keyword(s):

Job Loss ◽

Job Displacement ◽

Future Earnings ◽

Earnings Losses

The effect of job displacement on future earnings losses has often been calculated by comparing the earnings of individuals who suffer a displacement at some point in their career with the earnings of those who never lose a job. I show this approach leads to an overstatement of the earnings losses following displacement and discuss an alternative that can ascertain the true effects of displacement in some instances.

Download Full-text

Evaluating the Usability of Emergency Fund Target Web System among Young Adults

Journal of Computing Research and Innovation ◽

10.24191/jcrinn.v2i4.60 ◽

2018 ◽

Vol 2 (4) ◽

pp. 28-32

Author(s):

Izzatie Zakaria ◽

Nor Azzyati Hashim

Keyword(s):

Young Adults ◽

Financial Management ◽

Job Loss ◽

Usability Testing ◽

Ease Of Use ◽

Web System ◽

Emergency Fund ◽

The Web ◽

Web Systems

Young adults need to know the importance of having a good financial management to prevent the engagement in extensive debt. One of the ways is by having saving for emergency fund. Emergency fund is vital as it can be used during any unwanted events such as job loss, health emergency and other unexpected expenses. Most existing web systems for personal financial management are more towards budgeting and tracking e xpenditures. Thus, to encourage people especially young adults to build emergency fund, a web system called Emergency Fund Target (EFT) was developed. This paper investigates the ease - of - use and benefits of EFT web system among young adults. Evaluation for this web system using usability testing involved 15 young adults who already being employed. From the findings, it is discovered that EFT system is easy to use and enables users to learn about emergency fund in order to use the system to keep track their saving for emergency fund. For the future works o f EFT, the web system will enhance to advice users who has completed the emergency fund saving on moving into investment for short, medium and long term financial goals.

Download Full-text

Job Loss, Credit, and Crime in Colombia

American Economic Review: Insights ◽

10.1257/aeri.20190547 ◽

2021 ◽

Vol 3 (1) ◽

pp. 97-114

Author(s):

Gaurav Khanna ◽

Carlos Medina ◽

Anant Nyshadham ◽

Christian Posso ◽

Jorge Tamayo

Keyword(s):

Job Loss ◽

Policy Reform ◽

Economic Incentives ◽

Job Displacement ◽

Access To Credit ◽

Mass Layoffs ◽

Earnings Losses ◽

Banking Policy ◽

Younger Men ◽

Participation Decisions

We investigate the effects of job displacement, as a result of mass layoffs, on criminal arrests using a matched employer-employee crime dataset from Medellín, Colombia. Job displacement leads to immediate and persistent earnings losses and higher probability of arrest for both the displaced worker and family members. Leveraging a banking policy reform, we find that greater access to credit attenuates the criminal response to job loss. Impacts on arrests are pronounced for property crimes and among younger men for whom opportunities in criminal enterprises are prevalent. Taken together, our results are consistent with economic incentives contributing to criminal participation decisions after job losses. (JEL G21, G51, J63, K42, O16, O17)

Download Full-text

Job Displacement Risk and the Cost of Business Cycles

The American Economic Review ◽

10.1257/aer.97.3.664 ◽

2007 ◽

Vol 97 (3) ◽

pp. 664-686 ◽

Cited By ~ 66

Author(s):

Tom Krebs

Keyword(s):

Quantitative Analysis ◽

Theoretical Analysis ◽

Business Cycles ◽

Incomplete Markets ◽

Displaced Workers ◽

Job Displacement ◽

Macroeconomic Model ◽

Earnings Losses ◽

The Cost

This paper analyzes the welfare costs of business cycles when workers face uninsurable job displacement risk. The paper uses a simple macroeconomic model with incomplete markets to show that cyclical variations in the long-term earnings losses of displaced workers can generate arbitrarily large cost of business cycles even if the variance of individual income changes is constant over the cycle. In addition to the theoretical analysis, this paper conducts a quantitative study of the cost of business cycles using empirical evidence on the long-term earnings losses of US workers. The quantitative analysis shows that realistic variations in job displacement risk generate sizable costs of business cycles, even though a second-moment analysis would suggest negligible costs. (JEL E21, E24, E32, J63)

Download Full-text