How Replaceable Is a Low-Wage Job? / Evan K. Rose, Yotam Shem-Tov.

Format:

Book

Author/Creator:

Rose, Evan K.

Contributor:

National Bureau of Economic Research.

Shem-Tov, Yotam.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31447.

NBER working paper series no. w31447

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

We study the long-run consequences of losing a low-wage job using linked employer-employee wage records and household surveys. For full-time workers earning $15 per hour or less, job loss due to an idiosyncratic, firm-wide contraction generates a 13% reduction in earnings six years later and over $40,000 cumulative lost earnings. Most of the long-run decrease stems from reductions in employment and hours as opposed to wage rates: job losers are twice as likely to report being unemployed and looking for work. By contrast, workers initially earning $15-$30 per hour see comparable long-run earnings losses driven primarily by reductions in hourly wages. Calibrating a dynamic job ladder model to the estimates implies that the rents from holding a full-time $15 per hour job relative to unemployment are worth about $20,000, more than seven times monthly earnings.

Notes:

Print version record

July 2023.