<p>We consider the measurement of the cost of job displacement. With a Canadian panel survey we compare the consumption growth of households that experienced a permanent layoff to a control group of households that experienced a temporary layoff with known recall date. Because the firms employing the latter group are providing insurance, these workers approximate a benchmark of full insurance against job loss shocks. We estimate that permanent layoffs experience an average consumption loss of between 4% and 10%. Older workers and workers with high job tenure have losses closer to the top of this range.</p>
Authors
![Martin Browning](/sites/default/files/styles/square_desktop/public/2022-07/Martin%20Browning.jpg?itok=15ISWZWp)
Martin Browning
Research Associate University of Copenhagen
Martin is an IFS Research Associate, a Nuffield Senior Research Fellow and a Professor of Economics at the University of Oxford.
![Thomas Crossley](/sites/default/files/styles/square_desktop/public/2022-07/Tom%20Crossley.jpg?itok=8BNVWAtq)
Thomas F. Crossley
Research Fellow University of Michigan
Tom is a Research Fellow at IFS, a Research Professor for the Institute for Social Research at the University of Michigan.
Journal article details
- JEL
- D91; J63; J65
- Issue
- July 2008
Suggested citation
Browning, M and Crossley, T. (2008). 'The long run costs of job loss as measured by consumption changes' (2008)
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