Don't Look Down: The Consequences of Job Loss in a Flexible Labour Market

35 Pages Posted: 20 Dec 2018

See all articles by Richard Upward

Richard Upward

University of Nottingham - School of Economics

Peter W. Wright

University of Sheffield - Faculty of Social Sciences

Date Written: January 2019

Abstract

We estimate the earnings, hours and income effects of job loss for a representative sample of UK workers from 1991 to 2007. We follow workers before and after job loss, regardless of their labour market state, and we match displaced workers with similar non‐displaced workers. This provides a more comprehensive picture of the effect of job loss in the UK than previously available. Job loss causes a long‐run reduction in income that is due mainly to reductions in monthly pay rather than in employment propensity. Income from other labour market states and from welfare payments does little to compensate for income losses. This lack of a ‘safety net’ means that job loss in the UK has a similar impact to job loss in the USA.

Suggested Citation

Upward, Richard and Wright, Peter W., Don't Look Down: The Consequences of Job Loss in a Flexible Labour Market (January 2019). Economica, Vol. 86, Issue 341, pp. 166-200, 2019. Available at SSRN: https://ssrn.com/abstract=3304103 or http://dx.doi.org/10.1111/ecca.12254

Richard Upward (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 951 5151 (Phone)
+44 115 951 4159 (Fax)

Peter W. Wright

University of Sheffield - Faculty of Social Sciences ( email )

United Kingdom

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