IDEAS home Printed from https://ideas.repec.org/a/sae/ilrrev/v56y2003i4p682-698.html
   My bibliography  Save this article

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

Author

Listed:
  • Lori G. Kletzer
  • Robert W. Fairlie

Abstract

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.

Suggested Citation

  • Lori G. Kletzer & Robert W. Fairlie, 2003. "The Long-Term Costs of Job Displacement for Young Adult Workers," ILR Review, Cornell University, ILR School, vol. 56(4), pages 682-698, July.
    • Handle: RePEc:sae:ilrrev:v:56:y:2003:i:4:p:682-698
    DOI: 10.1177/001979390305600408
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/001979390305600408
    Download Restriction: no
    File URL: https://libkey.io/10.1177/001979390305600408?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
    ---><---

    References listed on IDEAS

    as
    1. Stevens, Ann Huff, 1997. "Persistent Effects of Job Displacement: The Importance of Multiple Job Losses," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 165-188, January.
    2. Topel, Robert, 1990. "Specific capital and unemployment: Measuring the costs and consequences of job loss," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 33(1), pages 181-214, January.
    3. Addison, John T & Portugal, Pedro, 1989. "Job Displacement, Relative Wage Changes, and Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 281-302, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. William J. Carrington & Bruce Fallick, 2014. "Why Do Earnings Fall with Job Displacement?," Working Papers (Old Series) 1405, Federal Reserve Bank of Cleveland.
    2. Jackson, Paul & Ortego-Marti, Victor, 2024. "Skill loss during unemployment and the scarring effects of the COVID-19 pandemic," Labour Economics, Elsevier, vol. 88(C).
    3. Simone Balestra & Uschi Backes-Gellner, 2017. "When a Door Closes, a Window Opens? Long-Term Labor Market Effects of Involuntary Separations," German Economic Review, Verein für Socialpolitik, vol. 18(1), pages 1-21, February.
    4. William J. Carrington, 2015. "Do We Know Why Earnings Fall with Job Displacement? Working Paper: 2015-01," Working Papers 49908, Congressional Budget Office.
    5. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
    6. Ortego-Marti, Victor, 2016. "Unemployment history and frictional wage dispersion," Journal of Monetary Economics, Elsevier, vol. 78(C), pages 5-22.
    7. Song, Younghwan, 2007. "Recall bias in the displaced workers survey: Are layoffs really lemons?," Labour Economics, Elsevier, vol. 14(3), pages 335-345, June.
    8. Ortego-Marti, Victor, 2017. "Loss of skill during unemployment and TFP differences across countries," European Economic Review, Elsevier, vol. 100(C), pages 215-235.
    9. J. Meekes & W.H.J. Hassink, 2016. "The role of the housing market in workers’ resilience to job displacement after firm bankruptcy," Working Papers 16-10, Utrecht School of Economics.
    10. Alexander Hijzen & Richard Upward & Peter W. Wright, 2010. "The Income Losses of Displaced Workers," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
    11. Gregor Jarosch, 2023. "Searching for Job Security and the Consequences of Job Loss," Econometrica, Econometric Society, vol. 91(3), pages 903-942, May.
    12. William J. Carrington & Bruce Fallick, 2017. "Why Do Earnings Fall with Job Displacement?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 688-722, October.
    13. Lori G. Kletzer & Robert W. Fairlie, 1999. "The Long-Term Costs of Job Displacement Among Young Workers," JCPR Working Papers 87, Northwestern University/University of Chicago Joint Center for Poverty Research.
    14. Amynah Vanessa Gangji & Robert Plasman, 2007. "The Matthew effect of unemployment: how does it affect wages in Belgium," DULBEA Working Papers 07-19.RS, ULB -- Universite Libre de Bruxelles.
    15. Ortego-Marti, Victor, 2017. "The Cyclical Behavior Of Unemployment And Vacancies With Loss Of Skills During Unemployment," Macroeconomic Dynamics, Cambridge University Press, vol. 21(6), pages 1277-1304, September.
    16. Aaron Flaaen & Matthew D. Shapiro & Isaac Sorkin, 2019. "Reconsidering the Consequences of Worker Displacements: Firm versus Worker Perspective," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(2), pages 193-227, April.
    17. Knesl, Jiří, 2023. "Automation and the displacement of labor by capital: Asset pricing theory and empirical evidence," Journal of Financial Economics, Elsevier, vol. 147(2), pages 271-296.
    18. Pawel Krolikowski, 2017. "Job Ladders and Earnings of Displaced Workers," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(2), pages 1-31, April.
    19. Cozzi, Marco & Fella, Giulio, 2016. "Job displacement risk and severance pay," Journal of Monetary Economics, Elsevier, vol. 84(C), pages 166-181.
    20. Jarosch, Gregor, 2021. "Searching for Job Security and the Consequences of Job Loss," CEPR Discussion Papers 15814, C.E.P.R. Discussion Papers.

    More about this item

    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:sae:ilrrev:v:56:y:2003:i:4:p:682-698. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: SAGE Publications (email available below). General contact details of provider: http://www.ilr.cornell.edu .

    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.