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Locate Your Nearest Exit: Mass Layoffs and Local Labor Market Response

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  • Andrew Foote
  • Michel Grosz
  • Ann Stevens

Abstract

Large shocks to local labor markets cause lasting changes to communities and their residents. We examine four main channels through which the local labor force adjusts following mass layoffs: in- and out-migration, retirement, and disability insurance enrollment. We show that these channels account for over half of the labor force reductions following a mass layoff event. By measuring the residual difference between these channels and labor force change, we also show that labor force non-participation grew in the period during and after the Great Recession. This result highlights the growing importance of non-participation as a response to labor demand shocks.

Suggested Citation

  • Andrew Foote & Michel Grosz & Ann Stevens, 2015. "Locate Your Nearest Exit: Mass Layoffs and Local Labor Market Response," Working Papers 15-25, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:15-25
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • 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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