No abstract

We examine administrative data on young German workers and their employers to study the long-term effects of an early career job loss. To account for nonrandom sorting of workers into firms with different turnover rates and for selective job mobility, we use changes over time in firm- and age-specific labor demand as an instrument for displacement. We find that wage losses of young job losers are initially 15 percent, but drop to zero within five years. Only workers leaving very large establishments suffer persistent losses. A comparison of estimators implies that initial sorting, negative selection, and voluntary job mobility biases ordinary least squares estimates toward finding permanent negative effects of early displacements. (JEL J13, J23, J24, J62, J63, M53)

We estimate that unemployment insurance (UI ) extensions reduce reemployment wages using sharp age discontinuities in UI eligibility in Germany. We show this effect combines two key policy parameters: the effect of UI on reservation wages and the effect of nonemployment durations on wage offers. Our framework implies if UI extensions do not affect wages conditional on duration, then reservation wages do not bind. We derive resulting instrumental variable estimates for the effect of nonemployment durations on wage offers and bounds for reservation wage effects. The effect of UI on wages we find arises mainly from substantial negative nonemployment duration effects.(JEL J31, J64, J65)At the peak of the Great Recession, Congress extended unemployment insurance (UI) durations to 99 weeks, almost four times the usual duration. While a substantial literature has assessed the potential consequences of such UI extensions on employment (e.g., Meyer 1990; Rothstein 2011; Kroft and Notowidigdo 2015; Schmieder, von Wachter, and Bender 2012a, b;Farber and Valletta 2013), fewer papers have studied the effect of UI extensions on reemployment wages. Recent studies find that UI extensions have small effects on reemployment wages with typically negative point estimates (e.g., Lalive 2007;Card, Chetty, and Weber 2007;Centeno and Novo 2009). In this paper we show that these estimates represent the sum of several potentially offsetting components: Firstly, UI extensions increase the outside option of workers and thus may push up equilibrium wages of individuals who find jobs (either due to an increase in reservation wages or a stronger bargaining position).

The lidA Cohort Study (German Cohort Study on Work, Age, Health and Work Participation) was set up to investigate and follow the effects of work and work context on the physical and psychological health of the ageing workforce in Germany and subsequently on work participation. Cohort participants are initially employed people subject to social security contributions and born in either 1959 (n = 2909) or 1965 (n = 3676). They were personally interviewed in their homes in 2011 and will be visited every 3 years. Data collection comprises socio-demographic data, work and private exposures, work ability, work and work participation attitudes, health, health-related behaviour, personality and attitudinal indicators. Employment biographies are assessed using register data. Subjective health reports and physical strength measures are complemented by health insurance claims data, where permission was given. A conceptual framework has been developed for the lidA Cohort Study within which three confirmatory sub-models assess the interdependencies of work and health considering age, gender and socioeconomic status. The first set of the data will be available to the scientific community by 2015. Access will be given by the Research Data Centre of the German Federal Employment Agency at the Institute for Employment Research (http://fdz.iab.de/en.aspx).