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Skill Remoteness and Post-layoff Labor Market Outcomes

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  • Claudia Macaluso

Abstract

Local skill remoteness captures the dissimilarity between the skill profiles of a worker's last job and other jobs in a local labor market. Higher skill remoteness at layoff is associated with persistently lower earnings after layoff, a higher probability of changing occupation, a lower probability of being reemployed at jobs with similar skill profiles, and a higher propensity to migrate. Jobs destroyed in recessions are also more skill remote than those lost in booms. The local skill remoteness of jobs is an empirically relevant factor to explain the severity and cyclicality of displaced workers' earnings losses and reallocation patterns.

Suggested Citation

  • Claudia Macaluso, 2025. "Skill Remoteness and Post-layoff Labor Market Outcomes," American Economic Journal: Macroeconomics, American Economic Association, vol. 17(2), pages 134-176, April.
    • Handle: RePEc:aea:aejmac:v:17:y:2025:i:2:p:134-76
    DOI: 10.1257/mac.20220062
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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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