Income in the Off-Season: Household Adaptation to Yearly Work Interruptions

57 Pages Posted: 13 Oct 2020

See all articles by John M. Coglianese

John M. Coglianese

Board of Governors of the Federal Reserve System

Brendan M. Price

Board of Governors of the Federal Reserve System

Date Written: October, 2020

Abstract

Joblessness is highly seasonal. To analyze how households adapt to seasonal joblessness, we introduce a measure of seasonal work interruptions premised on the idea that a seasonal worker will tend to exit employment around the same time each year. We show that an excess share of prime-age US workers experience recurrent separations spaced exactly 12 months apart. These separations coincide with aggregate seasonal downturns and are concentrated in seasonally volatile industries. Examining workers most prone to seasonal work interruptions, we find that these workers incur large earnings losses during the off-season. Lost earnings are (i) driven mainly by repeated separations from the same employer; (ii) not recouped at other firms; (iii) partly offset by unemployment benefits; and (iv) amplified by concurrent drops in partners' earnings. On net, household income falls by about 80 cents for each $1 lost in own earnings.

Keywords: Seasonality, Seasonal employment, Job loss, Household income, Household labor dynamics, Unemployment, Unemployment insurance

JEL Classification: D10, E32, J63

Suggested Citation

Coglianese, John M. and Price, Brendan M., Income in the Off-Season: Household Adaptation to Yearly Work Interruptions (October, 2020). FEDS Working Paper No. 2020-084, Available at SSRN: https://ssrn.com/abstract=3708418 or http://dx.doi.org/10.17016/FEDS.2020.084

John M. Coglianese (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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

HOME PAGE: http://https://www.federalreserve.gov/econres/john-m-coglianese.htm

Brendan M. Price

Board of Governors of the Federal Reserve System ( email )

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

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