Search Results
Working Paper
Job Heterogeneity and Aggregate Labor Market Fluctuations
This paper disciplines a model with search over match quality using microeconomic evidence on worker mobility patterns and wage dynamics. In addition to capturing these individual data, the model provides an explanation for aggregate labor market patterns. Poor match quality among first jobs implies large fluctuations in unemployment due to a responsive job destruction margin. Endogenous job destruction generates a burst of layoffs at the onset of a recession and, together with on-the-job search, generates a negative comovement between unemployment and vacancies. A significant job ladder, ...
Layoffs during the COVID-19 Pandemic: Four Findings from WARN Act Data
With economic conditions changing so rapidly during the COVID-19 pandemic, the standard layoff indicators that policymakers and analysts use are falling short. These indicators are either not released frequently enough, or they lack geographic or industry information. Some indicators, such as initial unemployment insurance claims, may be less accurate under the current extreme conditions because of processing delays, duplicate claims, and fraud.2
Working Paper
Goods-Market Frictions and International Trade
We present a tractable framework that embeds goods-market frictions in a general equilibrium dynamic model with heterogeneous exporters and identical importers. These frictions arise because it is time consuming and expensive for exporters and importers to meet. We show that search frictions lead to an endogenous fraction of unmatched exporters, alter the gains from trade, endogenize entry costs, and imply that the competitive equilibrium does not generally result in the socially optimal number of searching firms. Finally, ignoring search frictions results in biased estimates of the effect of ...
Journal Article
Parental Assistance after Job Loss
We have previously shown that young adults who live near their parents experience faster earnings recoveries after a job loss than young adults who live farther from their parents. In this analysis, we present evidence that demonstrates the relationship is causal; that is, there is something about living close to one?s parents that enables one to find another job that pays as well as the one lost. We also explore what type of parental help might be driving the relationship and find that it is possibly the provision of childcare and access to job networks, but likely not help with housing ...
Working Paper
Advance Layoff Notices and Labor Market Forecasting
We collect rich establishment-level data about advance layoff notices filed under the Worker Adjustment and Retraining Notification (WARN) Act since January 1990. We present in-sample evidence that the number of workers affected by WARN notices leads state-level initial unemployment insurance claims, changes in the unemployment rate, and changes in private employment. The effects are strongest at the one and two-month horizons. After aggregating state-level information to a national-level “WARN factor” using a dynamic factor model, we find that the factor substantially improves ...
Journal Article
Short-Time Compensation: An Alternative to Layoffs during COVID-19
We discuss the costs and benefits of short-time compensation (STC), an unemployment insurance program that allows workers with temporarily reduced hours to receive some unemployment insurance benefits. We describe the provisions for STC in the Middle Class Tax Relief and Job Creation Act of 2012 and the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act and report the utilization of STC before and after these acts. The number of states with STC programs has remained unchanged at 27 since the beginning of the pandemic, but STC utilization has recently risen to unprecedented ...
Working Paper
Choosing a Control Group for Displaced Workers
The vast majority of studies on the earnings of displaced workers use a control group of continuously employed workers to examine the effects of initial displacements. This approach implies long-lived earnings reductions following displacement even if these effects are not persistent, overstating the losses relative to the true average treatment effect. This paper?s approach isolates the impact of an average displacement without imposing continuous employment on the control group. In a comparison of the standard and alternative approaches using PSID data, the estimated long-run earnings ...
Journal Article
Measuring the True Impact of Job Loss on Future Earnings
The effect of job displacement on future earnings losses has often been calculated by comparing the earnings of individuals who suffer a displacement at some point in their career with the earnings of those who never lose a job. I show this approach leads to an overstatement of the earnings losses following displacement and discuss an alternative that can ascertain the true effects of displacement in some instances.
Working Paper
Excess Persistence in Employment of Disadvantaged Workers
We examine persistence in employment-to-population ratios in excess of that implied by persistence in aggregate labor market conditions, among less-educated individuals using state-level data for the United States. Dynamic panel regressions and local projections indicate a moderate degree of excess persistence, which dissipates within three years. We find no significant asymmetry between the excess persistence of high vs. low employment rates. The cumulative effect of excess persistence in the business cycle surrounding the 2001 recession was mildly positive, while the effect in the cycle ...
Journal Article
Parental Proximity and the Earnings Consequences of Job Loss
We find post-job-loss earnings recovery is faster for young adults who live near their parents than for young adults who live farther away. This positive effect diminishes gradually as the distance to one?s parents increases. Most of the effect is driven by higher wages after job displacement, not by differences in the number of hours worked. The effect is not present for older workers, who may be caring for elderly parents.