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Working Paper

Job Displacement and Job Mobility: The Role of Joblessness

Who is harmed by and who benefits from worker reallocation? We investigate the earnings consequences of changing jobs and find a wide dispersion in outcomes. This dispersion is driven not by whether the worker was displaced, but by the duration of joblessness between job spells. Job movers who experience joblessness suffer a persistent reduction in earnings and tend to move to lower-paying firms, suggesting that job ladder models offer a useful lens through which to understand the negative consequences of job separations.

Suggested Citation

Fallick, Bruce, John Haltiwanger, Erika McEntarfer, and Matthew Staiger. 2021. “Job Displacement and Job Mobility: The Role of Joblessness.” Federal Reserve Bank of Cleveland, Working Paper No. 19-27R.