Earnings losses and labor mobility over the lifecycle

Philip Jung ()

No 771, 2013 Meeting Papers from Society for Economic Dynamics

Abstract: Extensive literature demonstrates that workers with high tenure suffer large and persistent earnings losses when they are displaced. We study the reasons behind these losses in a tractable search model that includes a lifecycle dimension, endogenous job mobility, and worker- and match-heterogeneity. The model jointly explains key characteristics of the U.S. labor market such as large average transition rates, a large share of stable jobs, and earnings losses after displacement. We decompose earnings losses and find that only 50% result from wage loss, and endogenous reactions and selection account for the remainder. These findings have important implications for welfare costs of displacement and labor market policies.

Date: 2013
New Economics Papers: this item is included in nep-dge
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Related works:
Journal Article: Earnings Losses and Labor Mobility Over the Life Cycle (2019)
Working Paper: Earnings Losses and Labor Mobility Over the Life Cycle (2017)
Working Paper: Earnings losses and labor mobility over the lifecycle (2016)
Working Paper: Earnings Losses and Labor Mobility over the Lifecycle (2012)
Working Paper: Earnings losses and labor mobility over the life-cycle (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed013:771

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