Estimating the 'True' Cost of Job Loss: Evidence Using Matched Data from California 1991-2000

77 Pages Posted: 6 Aug 2009

See all articles by Till von Wachter

Till von Wachter

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

Elizabeth Weber Handwerker

Bureau of Labor Statistics

Andrew K.G. Hildreth

University of California, Berkeley - Department of Economics

Date Written: June 1, 2009

Abstract

Estimates of the cost of job displacement from survey and administrative data differ markedly. This paper uses a unique match of data between the Displaced Worker Survey (DWS) and administrative wage records from California to examine the sources of this discrepancy. When we use similar estimation methods and account for measurement error in survey wages correlated with worker demographics, estimates of earnings losses at displacement are similar from both datasets and significantly larger than those based on the DWS alone. Also correcting for measurement errors in reported displacements suggests both sources of such estimates may yield lower bounds for the true cost of displacement.

Suggested Citation

von Wachter, Till and Handwerker, Elizabeth Weber and Hildreth, Andrew, Estimating the 'True' Cost of Job Loss: Evidence Using Matched Data from California 1991-2000 (June 1, 2009). US Census Bureau Center for Economic Studies Paper No. CES-WP-09-14. Available at SSRN: https://ssrn.com/abstract=1444552 or http://dx.doi.org/10.2139/ssrn.1444552

Till Von Wachter (Contact Author)

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

Elizabeth Weber Handwerker

Bureau of Labor Statistics ( email )

2 Massachusetts Avenue NE
Washington, DC 20212
United States

HOME PAGE: http://www.bls.gov/ers

Andrew Hildreth

University of California, Berkeley - Department of Economics ( email )

California Census Research Data Center
Berkeley, CA 94720-3880
United States
510-643-0715 (Phone)
510-642-0822 (Fax)

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