[PEN-L:5038] Re: Unemployment Duration

["Eric Nilsson" <enilsson@xxxxxxxxxxxxxxx>]

Treacy wrote:
> . . . in the 1950's and early 1960's we were still experiencing major
> moves of workers out of agriculture.  Search times may be longer
> for those that have to make longer moves.

A possibility, certainly. However, workers moving to
the city likely would be classified by the BLS as "out of
the labor force" rather than "unemployed" because these
moving workers probably would stop actively looking for
work during the period of the move. This time moving
would not, therefore, add to "unemployment duration"
according to BLS definitions. However, if those moving
to the city were unfamiliar with how to get a job in an
unknown city, then certainly migration from country
to city could lead to a longer unemployment duration
than otherwise would be the case.


Treacy wrote:
> The cost of job lose might also force job losers to seek
> other alternatives that might lead to better situations
> than the one they lost.

That too is a possibility for SOME lucky workers who
left employment involutarily. It is unlikely to be true
for the "average worker" who loses senority, "firm
specific human capital," rights to past firm pension
plan contributions, etc..

A census study reported that for all unemployed workers
(including both voluntary and involuntary job leavers)
"Men 25 to 64 who found or returned to jobs experience
a 10.1 percent reduction in hourly earnings."  This 10.1%
drop is likely a major underestimate of the wage reduction
experienced by those fired/laid off permanently as the
census study included those on temporary layoff who
were recalled (I assume) at the same wage rate as before
layoff.


Other studies (which I don't have at hand) report an average
income/wage loss of 15-20 percent for "displaced workers"
after reemployment.


Eric Nilsson
Department of Economics
California State University
San Bernardino, CA 92407
enilsson@xxxxxxxxxxxxxxx