Using Unexpected Recalls to Examine the Long-Term Earnings Effects of Job Displacement

57 Pages Posted: 25 Apr 2007

See all articles by Yolanda K. Kodrzycki

Yolanda K. Kodrzycki

Federal Reserve Bank of Boston - Research Department

Date Written: August 8, 2007

Abstract

This paper examines the long-term earnings consequences of permanent layoffs initiated during the early 1990s, using a sample of Massachusetts workers who enrolled in Job Training Partnership Act Title III programs, and who remained strongly attached to the state's labor force. The comparison group is formed by workers who were unexpectedly recalled. On average, recalled workers incurred substantial annual earnings reductions upon reemployment. Nevertheless, one decade later, permanently displaced workers were still earning between 11 and 17 percent less per year than recalled workers with comparable pre-layoff skills and experience. Workers with limited education experienced particularly large earnings reductions from permanent job loss. This paper was revised in August 2007.

JEL Classification: J24, J31, J64, J65

Suggested Citation

Kodrzycki, Yolanda K., Using Unexpected Recalls to Examine the Long-Term Earnings Effects of Job Displacement (August 8, 2007). FRB of Boston Working Paper No. 07-2, Available at SSRN: https://ssrn.com/abstract=982388 or http://dx.doi.org/10.2139/ssrn.982388

Yolanda K. Kodrzycki (Contact Author)

Federal Reserve Bank of Boston - Research Department ( email )

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