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Journal Article
Ciudad Juarez retools amid job losses
Ciudad Juarez, across the Rio Grande from El Paso, lost nearly one-fifth of its manufacturing jobs over a two-year period. The decline reflects the city’s move into higher value-added, less labor-intensive production of electronics and hardware demanded for the U.S.’s burgeoning data center build-out.
Working Paper
Parental Proximity and Earnings after Job Displacements
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 ...
Discussion Paper
Conclusion: How Low Will the Unemployment Rate Go?
A major theme of the posts in our labor market series has been that the outflows from unemployment, either into employment or out of the labor force, have been the primary determinant of unemployment rate dynamics in long expansions. The key to the importance of outflows is that within long expansions there have not been adverse shocks that lead to a burst of job losses. To illustrate the power of this mechanism, we presented simulations in a previous post that were based on the movements in the outflow and inflow rates in the previous three expansions. These simulated paths show the ...
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.
Journal Article
An Alternative Version of the KC Fed LMCI Suggests the Level of Activity Was Little Changed but Momentum Decelerated Sharply in October
Last month, we published an alternative version of the Kansas City Fed’s Labor Market Conditions Indicators (LMCI) that excludes delayed government series to continue tracking the health of the labor market in a systematic fashion. The October reading of this restricted LMCI suggests little change in the labor market, but a deceleration in labor market momentum caused by a high number of announced job cuts. This has pushed down our model's forecast of payroll employment growth for October.
Race and the Threat of Job Loss from Automation
Kristen Broady, fellow at Brookings Metro, discusses the vulnerability of Black and Hispanic workers to automation.
Working Paper
Reconsidering the Consequences of Worker Displacements : Firm versus Worker Perspective
Prior literature has established that displaced workers suffer persistent earnings losses by following workers in administrative data after mass layoffs. This literature assumes that these are involuntary separations owing to economic distress. This paper examines this assumption by matching survey data on worker-supplied reasons for separations with administrative data. Workers exhibit substantially different earnings dynamics in mass layoffs depending on the reason for separation. Using a new methodology to account for the increased separation rates across all survey responses during a mass ...
Working Paper
Disparate Impacts of Job Loss by Parental Income and Implications for Intergenerational Mobility
Does job loss cause less economic damage if your parents are higher-income, and what are the implications for intergenerational mobility? In this paper we show that following a layoff, adult children born to parents in the bottom 20% of the income distribution have almost double the unemployment compared with those born to parents in the top 20%, with 118% higher present discounted value losses in earnings. Next, we show that these disparate impacts of job loss have important implications for inequality and intergenerational mobility. They increase the 80:20 income inequality ratio for those ...
Working Paper
Parental Proximity and Earnings After Job Displacements
The earnings of young adults who live in the same neighborhoods as their parents completely recover after a job displacement, unlike the earnings of young adults who live farther away, which permanently decline. Nearby workers appear to benefit from help with childcare since grandmothers are less likely to be employed after their child's job displacement and since the earnings benefits are concentrated among young adults who have children. The result also suggests that parental employment networks improve earnings. Differences in job search durations, transfers of housing services, and ...
Journal Article
Women Take a Bigger Hit in the First Wave of Job Losses due to COVID-19
The temporary shutdown orders and social distancing measures taken to fight the COVID-19 outbreak have caused substantial job losses in the United States. Women, especially those without a college degree, have taken a bigger hit in the first wave of job losses. This imbalance could lead to prolonged damage to women’s employment and labor market attachment if job losses deepen and persist in the coming months.