Parental Proximity and Earnings after Job Displacements

75 Pages Posted: 4 Dec 2017

See all articles by Patrick Coate

Patrick Coate

Duke University

Pawel Michal Krolikowski

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Michael A. Zabek

Board of Governors of the Federal Reserve System

Date Written: November 29, 2017

Abstract

Young adults, ages 25 to 35, who live in the same neighborhoods as their parents experience stronger earnings recoveries after a job displacement than those who live farther away. This result is driven by smaller on-impact wage reductions and sharper recoveries in both hours and wages. We show that geographic mobility, different job search durations, housing transfers, and ex-ante differences between individuals are unlikely explanations. Our findings are consistent with a framework in which some individuals living near their parents face a better wage-offer distribution, though we find no direct evidence of parental network effects.

Keywords: Parents, adult children, job loss, neighborhood, transfers, networks

JEL Classification: J61, J64, R23

Suggested Citation

Coate, Patrick and Krolikowski, Pawel Michal and Zabek, Michael Alexander, Parental Proximity and Earnings after Job Displacements (November 29, 2017). FRB of Cleveland Working Paper No. 17-22, Available at SSRN: https://ssrn.com/abstract=3081164 or http://dx.doi.org/10.2139/ssrn.3081164

Patrick Coate

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Pawel Michal Krolikowski (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

Michael Alexander Zabek

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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