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Long-Term Earnings Losses Due To Mass Layoffs During The 1982 Recession: An Analysis Using U.S. Administrative Data From 1974 To 2004

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Executive Summary

This paper uses longitudinal data from Social Security records covering up to 30 years of earnings to present the first national estimates of the long-term cost of job displacements during the 1982 recession. The authors use a new longitudinal data set containing firm size to isolate workers who separate from their stable job during a sudden mass-layoff. When they compare the workers displaced from their jobs to similar non-displaced workers, they find large immediate losses in annual earnings of 30%. After 15 to 20 years, these losses are still 20% and thus represent a significant setback in workers' life-time resources.

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