Earnings losses of displaced workers revisited

KA Couch, DW Placzek - American Economic Review, 2010 - aeaweb.org
KA Couch, DW Placzek
American Economic Review, 2010aeaweb.org
Earnings losses of Connecticut workers affected by mass layoff are calculated using
administrative data. Estimated reductions are initially more than 30 percent and six years
later, as much as 15 percent. The Connecticut estimates are smaller than comparable ones
from Pennsylvania administrative data but similar to those from the Panel Study of Income
Dynamics (PSID) and Department of Workforce Services (DWS). Earnings reductions in
Connecticut and Pennsylvania are concentrated among Unemployment Insurance …
Earnings losses of Connecticut workers affected by mass layoff are calculated using administrative data. Estimated reductions are initially more than 30 percent and six years later, as much as 15 percent. The Connecticut estimates are smaller than comparable ones from Pennsylvania administrative data but similar to those from the Panel Study of Income Dynamics (PSID) and Department of Workforce Services (DWS). Earnings reductions in Connecticut and Pennsylvania are concentrated among Unemployment Insurance recipients. An unusually high proportion of Unemployment Insurance beneficiaries in Pennsylvania explains the larger estimated losses relative to other studies. Fixed-effects, random growth, and matching estimators produced similar earnings loss estimates suggesting each is relatively unbiased in this context.
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