The Effect of Labor Market Shocks across the Life Cycle

2022/08/17 by Kjell G. Salvanes, Barton Willage, Alexander Willén
Health Professions · Social Sciences · #Employment and Welfare Studies #Gender, Labor, and Family Dynamics #Global Health Care Issues

paper · doi:10.1086/722086

openalex publication_date 2022/08/17 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/26

Abstract

Economic shocks occur frequently and may cause individuals to reevaluate key life decisions in ways that have lasting consequences for themselves and the broader economy. These decisions are tied to life stages, and the effect of economic shocks may differ depending on when they occur. We exploit exogenous job separations to study the impact of adverse shocks across the life cycle on labor market outcomes and major life decisions: education, mobility, family structure, and retirement. We find significant heterogeneity across the life cycle and conclude that focusing on average effects among workers across the life cycle misses a great deal.

Citations

• The Effect of Job Displacement on Couples’ Fertility Decisions
• Gender Identity and Relative Income within Households*
• The Costs of Job Displacement over the Business Cycle and Its Sources: Evidence from Germany