Are the Lasting Effects of Employee-Employer Separations induced by Layoff and Disability Similar? Exploring Job Displacement using Survey and Administrative Data

This paper integrates the existing literatures on displacement and health by examining the enduring effects of job dislocations that are induced by firm and individual shocks to employment. A joint estimation of hourly wage rates and weekly hours illuminates the disparities in these economic outcomes that exist between those who have reestablished themselves in the workplace subsequent to a layoff and those who have returned to work following the onset of a disability relative to those with uninterrupted job histories. As an extension of these ideas, employment transitions and workplace adjustments are modeled to capture spousal reactions to these shocks. Multiple indicators of health from the Survey of Income and Program Participation and Social Security Administrative benefits records are incorporated into the analyses of those with impairments that prompted job loss. These measures allow knowledge to be gleaned regarding the qualitative di¤erences in the lasting impacts of job cessation resulting from medically diagnosed illnesses as compared to estimates uncovered using survey data sources alone. By considering time durations following these periods of separation in light of these indicators of well-being, a more comprehensive understanding of the long-run repercussions of employee-employer separation is acquired.