Parental Proximity and Earnings after Job Displacements
75 Pages Posted: 4 Dec 2017
Date Written: November 29, 2017
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: Suggested Citation