Parental Proximity and Earnings after Job Displacements

RePEc Short ID: pkr218
ORCID iD: 0000-0001-5922-5894

Coate, Patrick; Krolikowski, Pawel; Zabek, Mike

doi:10.26509/frbc-wp-201722

Working Paper

Parental Proximity and Earnings after Job Displacements

Abstract: 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; neighborhoods; transfers; networks; ;

JEL Classification: J61; J64; R23;

https://doi.org/10.26509/frbc-wp-201722