Antoine Bertheau, Edoardo Maria Acabbi, Cristina Barceló, Andreas Gulyas, Stefano Lombardi, Raffaele Saggio, 11 March 2022

Studying the consequences of job loss can help us understand the extent to which labour markets efficiently reallocate unemployed workers to new jobs. Using a dataset that combines administrative records from seven countries with diverse labour market institutions, this column finds that the consequences of losing one’s job vary across countries. Workers in Denmark and Sweden experience the lowest earnings declines following job loss, while workers in Italy, Spain, and Portugal experience losses three times as high. Labour market institutions have the potential to mitigate these differences.

Bilge Erten, Pinar Keskin, 18 February 2022

Import competition and trade-induced job losses impact people differently by gender. However, little is known about the potential effects of trade liberalisation on intimate partner violence experienced by women. This column examines the aftermath of large-scale unilateral trade liberalisation enacted by Cambodia in 2004 when it became a WTO member. In districts facing larger tariff reductions, men’s paid employment significantly declined, while women’s employment in family enterprises increased. Women in those districts also experienced an increase in physical, sexual, and psychological violence. Neglecting such potentially large backlashes may yield upward-biased estimates of the societal benefits of trade liberalisation.

Asger Lau Andersen, Amalie Jensen, Niels Johannesen, Claus Thustrup Kreiner, Søren Leth-Petersen, Adam Sheridan, 08 June 2021

To what extent do households self-insure to avoid cutting back on consumption following income losses, and which self-insurance channels are most important? This column reviews evidence on household responses to job loss using comprehensive high-frequency data from multiple sources in Denmark. Over the two years following job loss, 30% of the decline in disposable income is accounted for by a drop in household spending, leaving a gap of 70% that reflects the effects of self-insurance. This gap is filled by lower accumulation of liquid assets (~50%), increases in private transfers and other inflows (~10%), higher spousal labour supply (~5%), and lower net debt repayments (~5%). Mortgage borrowing and refinancing play only a small role.

Francesco Fasani, Jacopo Mazza, 25 January 2021

The spread of COVID-19 has had dire consequences for the earnings and employment of workers in Europe. As in most recessions, immigrants are among the most vulnerable workers. This column proposes a measure of employment risk based on workers’ job attributes which sidesteps the lack of an up-to-date European labour force survey, and estimates that the pandemic-induced recession puts 9 million immigrant workers at high risk of unemployment in Europe.

Sonia Bhalotra, 13 November 2020

There has been a global surge in domestic violence since the onset of Covid-19. This column provides insights into what may be driving this rise, drawing on evidence from Brazil. Job loss leads to increases in domestic violence, irrespective of whether it is the perpetrator or victim whose job is lost. Both income stress and an increase in time spent together seem to contribute to this. Unemployment benefits have mitigation potential if they can be supplemented by policies designed to encourage a return to work. 

Robert Hall, Marianna Kudlyak, 24 June 2020

The global COVID-19 pandemic has led to job loss of catastrophic proportions in the United States. This column looks at recoveries from recessions over past 70 years to assess how the US labour market might recover from this job loss of unprecedented magnitude. Remarkably consistent recoveries have occurred in the US after every recessionary shock that caused a spike in unemployment, and there are reasons to believe that the recovery from the current shock will be more rapid, because unemployment contains a much larger fraction of workers on temporary layoff than in previous recoveries. However, there is a great deal of uncertainty about the possible recovery rate.

Petr Sedláček, Vincent Sterk, 25 April 2020

Startups are being hit hard by the COVID-19 pandemic and the lockdown. Introducing a ‘startup calculator’ that allows anyone to compute the aggregate employment losses under various economic scenarios, this column explores the effects of a decline in startup activity on aggregate employment. Job losses may be large and may last well beyond the pandemic itself.

Olivier Coibion, Yuriy Gorodnichenko, Michael Weber, 14 April 2020

The Covid-19 crisis in the US and the policy responses have led to unprecedented numbers of initial claims for unemployment, but there are concerns that total job losses are being understated. This column uses a repeated large-scale survey of households in the Nielsen Homescan panel to show that job loss has been significantly greater than implied by new unemployment claims, with an estimated 20 million jobs lost by 8 April – far more than were lost over the entire Great Recession. Many of those who have lost their jobs are not actively looking to find new ones.

Patrick Bennett, Amine Ouazad, 29 October 2016

A substantial body of literature finds significant effects of unemployment rates on crime rates. However, relatively little is known about the direct impact of individual unemployment on individual crime. This column examines the effect of job displacement on crime using 15 years of Danish administrative data. Being subject to a sudden and unexpected mass-layoff is found to increase the probability that an individual commits a crime. However, the findings stress the importance of policies targeting education and income inequality in mitigating crime.

Andrew Foote, Michel Grosz, Ann Stevens, 17 November 2015

In light of the Great Recession, we continue to learn new ways in which economic downturns directly affect the labour market. This column suggests that following an adverse demand shock, individuals exit local labour markets primarily through migration, but that has become less prominent in the Great Recession. Faced with declining economic prospects, workers are becoming more likely to stay put, without re-entering the labour market. 


CEPR Policy Research