Sources of displaced workers’ long-term earnings losses

Project Summary:

Pervasive earnings losses are a well-documented feature of job displacement, yet the understanding of the sources of these earnings losses is limited. The decline could be due to a lower wage at a new job, a lower likelihood of finding a new job, working fewer hours, or the loss of firm-specific rents. This project proposes to take advantage of employer-employee matched administrative data from Washington state’s unemployment insurance program to better understand the sources of earnings losses and to analyze the role of employer characteristics in job losses. Obtaining a better diagnosis of the root causes behind the long-term earnings decline can lead to better-designed policy responses.


Stephen A. Woodbury is a professor of economics at Michigan State University and a senior economist at the W.E. Upjohn Institute for Employment Research. His research has focussed on unemployment insurance, reemployment programs, non-wage compensation, pensions, and health insurance, and has been published in journals such as the American Economic Review, Review of Economics and Statistics, Journal of Labor Economics, Health Economics, National Tax Journal, and Labour Economics. During 1993–1994 he was Deputy Director of the Advisory Council on Unemployment Compensation (U.S. Department of Labor), and during 2014–2015 he was a Visiting Professor in the economics department and the Industrial Relations Section at Princeton University. He earned his PhD in economics at the University of Wisconsin–Madison in 1981.