The Long-Run Cost of Job Loss as Measured by Consumption Changes
Martin Browning and
Social and Economic Dimensions of an Aging Population Research Papers from McMaster University
The costs of involuntary job loss are of substantial research and policy interest. We consider the measurement of the cost of job displacement with household expenditure data. With a Canadian panel survey of individuals who experienced a job separation, we compare the consumption growth of households that experienced a permanent layoff to a control group of households that experienced a temporary layoff with known recall date. Because the firms employing the latter group are providing insurance, these workers approximate a bench mark of full insurance against job loss shocks. We estimate that permanent layoffs experience an average consumption loss of between 4 and 10 percent. Older workers and workers with high job tenure have losses closer to the top of this range.
Keywords: Job Displacement; Consumption (search for similar items in EconPapers)
JEL-codes: D91 J63 J65 (search for similar items in EconPapers)
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Journal Article: The long-run cost of job loss as measured by consumption changes (2008)
Working Paper: The Long-Run Cost of Job Loss as Measured by Consumption Changes (2006)
Working Paper: The Long Run Costs of Job Loss as Measured by Consumption Changes (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:sedapp:152
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