Displaced Workers' Long-Term Earnings Losses

Co-funded with the Washington Center for Equitable Growth

Although previous research has shown that earnings losses for displaced workers are large and long-lasting, little is known about the sources of those losses or how they might be mitigated. Economists Stephen Woodbury, Marta Lachowska and Alexandre Mas will exame different theoretical explanations of why displaced workers suffer such significant earnings losses: Do they result from lower hourly wage rates paid to displaced workers after reemployment, or from lower likelihood of employment and fewer hours worked after displacement? What is the role of employers in generating displaced workers’ earnings losses? For example, do displaced workers lose jobs with high-paying employers and find jobs with lower-paying employers?