Arbeitspapier

The intergenerational effects of worker displacement

This paper uses variation induced by firm closures to explore the intergenerational effects of worker displacement. Using a Canadian panel of administrative data that follows almost 60,000 father-child pairs from 1978 to 1999 and includes detailed information about the firms at which the father worked, we construct narrow treatment and control groups whose fathers had the same level of permanent income prior to 1982 when some of the fathers were displaced. We demonstrate that job loss leads to large permanent reductions in family income and small increases in mobility and divorce. Comparing outcomes among individuals whose fathers experienced an employment shock to outcomes among individuals whose fathers did not, we find that children whose fathers were displaced have annual earnings about 9% lower than similar children whose fathers did not experience an employment shock. They are also more likely to receive unemployment insurance and social assistance. The estimates are driven by the experiences of children whose family income was at the bottom of the income distribution, and are robust to a number of specification checks. This work was completed while Oreopoulos was a Statistics Canada Research Fellow and member of the Family and Labour Studies Division of Statistics Canada. The financial support of the National Science Foundation is gratefully acknowledged. We also wish to thank Miles Corak, and seminar participants at Brown University, MIT, Princeton University, Stanford University, Yale University, the University of California Berkeley, UCLA, the University of Toronto and the NBER summer institute for their helpful comments.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 05-21

Classification
Wirtschaft
Subject
Kündigung
Generationenbeziehungen
Verdienstausfall
Kanada

Event
Geistige Schöpfung
(who)
Page, Marianne
Stevens, Ann Huff
Oreopoulos, Philip
Event
Veröffentlichung
(who)
University of California, Department of Economics
(where)
Davis, CA
(when)
2005

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Page, Marianne
  • Stevens, Ann Huff
  • Oreopoulos, Philip
  • University of California, Department of Economics

Time of origin

  • 2005

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