Earnings Losses of Older Displaced Workers: A Detailed Analysis with Administrative Data

Kenneth Couch, University of Connecticut
Nicholas A Jolly, Connecticut Department of Labor
Dana W Placzek, Connecticut Department of Labor

This paper provides detailed estimates of earnings losses of older workers (ages 40 and over) who experience mass layoffs relative to a continuously employed comparison group. Relative to previous research that utilized survey data, the analysis here employs administrative data from unemployment insurance records in the State of Connecticut. This provides the basis for detailed, disaggregated estimates by age, gender, and industry of employment. The results indicate that earnings losses from mass layoffs are sustained six years following job loss. For the average worker aged 40 at the time of job loss, earnings remain 14% below the comparison group six years later. The equivalent figure for those ages 70 and over is 63%. The earnings losses by gender are generally larger for men than women, but typically represent similar proportions. Across industries, the largest losses occur in the Business and Professional Services, Finance Insurance and Real Estate, and Manufacturing industries.