Stephen A. Woodbury
Department of Economics
Michigan State University
486 West Circle Drive, Room 110
East Lansing, MI 48824
NBER Working Papers and Publications
|January 2018||Sources of Displaced Workers’ Long-Term Earnings Losses|
with Marta Lachowska, Alexandre Mas: w24217
We estimate the earnings losses of a cohort of workers displaced during the Great Recession and decompose those long-term losses into components attributable to fewer work hours and to reduced hourly wage rates. We also examine the extent to which the reduced earnings, work hours, and wages of these displaced workers can be attributed to factors specific to pre- and post-displacement employers; that is, to employer-specific fixed effects. The analysis is based on employer-employee linked panel data from Washington State assembled from 2002–2014 administrative wage and unemployment insurance (UI) records.
Three main findings emerge from the empirical work. First, five years after job loss, the earnings of these displaced workers were 16 percent less than those of comparison groups of non...