Published: 2017
Authors: Dean Hyslop, Wilbur Townsend
Job loss hurts workers
low employment and earnings
even with support.
Using both regression-adjustment and propensity score matching methods, we estimate that experiencing a job displacement substantially affected workers employment, earnings and income over the following five years.
Compared to workers who did not lose their jobs, we estimate their employment rate was 20-25% lower in the year following displacement and, although their employment gradually improved, was still 8-12% lower five years later. Similarly, we estimate displaced workers’ conditional earnings and total income were 25-30% lower in the first year and 13-22% lower five years after being displaced. Such adverse effects are partly counterbalanced by higher levels of welfare benefit receipt and income support: benefit receipt was 6-11% and 3-4% higher after one and five years. We also find that the impacts were stronger for workers displaced from jobs during the great recession from 2008, with about 5% larger short and longer-term effects on employment, which were balanced by 3-5% higher rates of benefit receipt.
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