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Job Displacement and Earnings Losses: The Role of Joblessness

Bruce Fallick et al.

American Economic Journal: Macroeconomics2025https://doi.org/10.1257/mac.20210329article
AJG 4ABDC A*
Weight
0.53

Abstract

A large literature finds that workers displaced in mass layoffs experience persistent earnings losses. We find that the earnings penalty from job displacement is mediated by the length of the jobless spell after displacement. Workers who experience little or no joblessness suffer no losses on average; those who experience a prolonged period of joblessness experience large, persistent earnings losses. Job movers who experience joblessness tend to move to lower-paying firms, a phenomenon that informs our understanding of the mechanisms that generate earnings losses. We also find that jobless duration predicts earnings outcomes for separators generally, not only displaced workers. (JEL E24, J24, J31, J62, J63, J64)

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https://doi.org/https://doi.org/10.1257/mac.20210329

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@article{bruce2025,
  title        = {{Job Displacement and Earnings Losses: The Role of Joblessness}},
  author       = {Bruce Fallick et al.},
  journal      = {American Economic Journal: Macroeconomics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1257/mac.20210329},
}

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Job Displacement and Earnings Losses: The Role of Joblessness

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Evidence weight

0.53

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.70 × 0.15 = 0.10
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.