Job Ladder, Human Capital, and the Cost of Job Loss

Richard Audoly, Federica De Pace () and Giulio Fella
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Federica De Pace: https://cepr.org/about/people/federica-de-pace

No 1043, Staff Reports from Federal Reserve Bank of New York

Abstract: High-tenure workers who lose their jobs experience a large and prolonged fall in wages and earnings. To quantify the forces behind this empirical regularity, we propose a rich structural model of the labor market with heterogeneous firms, on-the-job search, and firm-specific and general human capital. By jointly matching moments of workers’ mobility and wages, the model can replicate the losses in earnings and wages observed in the data. The loss of a job with a more productive employer is the primary driver of the cumulated wage losses post-displacement (50 percent), followed by the loss of firm-specific human capital (30 percent).

Keywords: job loss; on-the-job search; human capital (search for similar items in EconPapers)
JEL-codes: J0 J3 J6 (search for similar items in EconPapers)
Pages: 45
Date: 2022-12-01
New Economics Papers: this item is included in nep-dge, nep-hrm and nep-lab
Note: Revised March 2024.
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Working Paper: Job Ladder, Human Capital, and the Cost of Job Loss (2022)
Working Paper: Job ladder, human capital, and the cost of job loss (2022)
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