Panel Paper: Parental Proximity and the Earnings Consequences of Job Loss

Thursday, November 2, 2017
Gold Coast (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Patrick Coate, American Institute for Economic Research, Pawel Krolikowski, Federal Reserve Bank of Cleveland and Mike Zabek, University of Michigan

We find post-job-loss earnings recovery is faster for young adults who live near their parents than for young adults who live farther away. This positive effect diminishes gradually as the distance to one’s parents increases. Most of the effect is driven by higher wages after job displacement, not by differences in the number of hours worked. The effect is not present for older workers, who may be caring for elderly parents.