Title

Sources of Displaced Workers’ Long-Term Earnings Losses

Author(s)

Marta Lachowska Marta Lachowska (W.E. Upjohn Institute for Employment Research)

Alexandre Mas Alexandre Mas (Princeton University)

Stephen A. Woodbury Stephen Woodbury (Michigan State University and W.E. Upjohn Institute.)

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.

Creation Date

2019-10

Section URL ID

Paper Number

631

URL

https://dataspace.princeton.edu/bitstream/88435/dsp01n870zt699/3/631.pdf

File Function

Jel

C21, J22, J23, J38, J65

Keyword(s)

Suppress

false

Series

1