IDEAS home Printed from https://ideas.repec.org/a/aea/aejmac/v17y2025i2p177-205.html
   My bibliography  Save this article

Job Displacement and Earnings Losses: The Role of Joblessness

Author

Listed:
  • Bruce Fallick
  • John Haltiwanger
  • Erika McEntarfer
  • Matthew Staiger

Abstract

A large literature finds that workers displaced in mass layoffs experience persistent earnings losses. We find that the earnings penalty from job displacement is mediated by the length of the jobless spell after displacement. Workers who experience little or no joblessness suffer no losses on average; those who experience a prolonged period of joblessness experience large, persistent earnings losses. Job movers who experience joblessness tend to move to lower-paying firms, a phenomenon that informs our understanding of the mechanisms that generate earnings losses. We also find that jobless duration predicts earnings outcomes for separators generally, not only displaced workers.

Suggested Citation

  • Bruce Fallick & John Haltiwanger & Erika McEntarfer & Matthew Staiger, 2025. "Job Displacement and Earnings Losses: The Role of Joblessness," American Economic Journal: Macroeconomics, American Economic Association, vol. 17(2), pages 177-205, April.
    • Handle: RePEc:aea:aejmac:v:17:y:2025:i:2:p:177-205
    DOI: 10.1257/mac.20210329
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/mac.20210329
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://www.aeaweb.org/articles/materials/22741
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/materials/22742
    Download Restriction: no
    File URL: https://libkey.io/10.1257/mac.20210329?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    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
    • 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
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmac:v:17:y:2025:i:2:p:177-205. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.