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Title: How Replaceable Is a Low-Wage Job?

Citation Type: Miscellaneous

Publication Year: 2023

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Abstract: 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 more than seven times monthly earnings.

Url: https://yotamshemtov.github.io/files/lowwage_rs.pdf

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Authors: Rose, Evan K; Shem-Tov, Yotam

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Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Poverty and Welfare

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