Mortality, Mass-Layoffs, and Career Outcomes: An Analysis Using Administrative Data

73 Pages Posted: 29 Nov 2007 Last revised: 26 Sep 2010

See all articles by Daniel G. Sullivan

Daniel G. Sullivan

Federal Reserve Bank of Chicago

Till von Wachter

Columbia Business School - Economics Department; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 2007

Abstract

This paper uses administrative data on quarterly employment and earnings matched to death records to estimate the effects of job displacement on mortality. We find that job displacement leads to a 15-20% increase in death rates during the following 20 years. If such increases were sustained beyond this period, they would imply a loss in life expectancy of about 1.5 years for a worker displaced at age 40. These results are robust to extensive controls for sorting and selection, and are consistent with estimates of the effects of job loss on mortality pooling displaced workers and stayers that are not affected by selective job displacement. To examine the channels through which mass layoffs raise mortality, we exploit the panel nature of our data -- covering over 15 years of earnings -- to analyze the correlation of long-run career outcomes, such as the mean and standard deviation of earnings, with mortality at the individual and group level, something not possible with typical data sets. Our findings suggest that factors correlated with a decrease in mean earnings and a rise in standard deviation of earnings have the potential to explain an important fraction of the effect of a job displacement on mortality.

Suggested Citation

Sullivan, Daniel G. and von Wachter, Till, Mortality, Mass-Layoffs, and Career Outcomes: An Analysis Using Administrative Data (November 2007). NBER Working Paper No. w13626. Available at SSRN: https://ssrn.com/abstract=1033752

Daniel G. Sullivan (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

Till Von Wachter

Columbia Business School - Economics Department ( email )

420 West 118th Street
New York, NY 10027
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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