Working Paper

Job-to-Job Flows and the Consequences of Job Separations


Abstract: A substantial empirical literature documents large and persistent average earnings losses following job displacement. Our paper extends the literature on displaced workers by providing a comprehensive picture of earnings and employment outcomes for all workers who separate. We show that for workers not recalled to their previous employer, earnings losses follow separations in general, as opposed to displacements in particular. The key predictor of earnings losses is not displacement but the length of the nonemployment spell following job separation. Moreover, displaced workers are no more likely to experience a substantial spell of nonemployment than are other non-recalled separators. Our results suggest that future research on the consequences of job loss should work to disentangle the strong association between nonemployment and earnings losses, as opposed to focusing specifically on displaced workers.

JEL Classification: J63; J64;

https://doi.org/10.26509/frbc-wp-201927

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Authors

    Haltiwanger, John

    McEntarfer, Erika

    Fallick, Bruce C.

    Staiger, Matthew

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers

Publication Date: 2019-12-13

Number: 192700