Ann Huff Stevens

Persistent Effects of Job Displacement: The Importance of Multiple Job Losses

This article examines the long-term wage and earnings losses of displaced workers, using longitudinal data from the Panel Study of Income Dynamics. Consistent with previous research, I find that the effects of displacement are quite persistent, with earnings and wages remaining approximately 9% below their expected levels 6 or more years after displacement. I then show that much of this persistence can be explained by additional job losses in the years following an initial displacement. Workers who avoid additional displacements have earnings and wage losses of 1% and 4% 6 or more years after job loss.

Job Loss and Employment Patterns of Older Workers

This article uses data from the Health and Retirement Study to examine the employment patterns of workers aged 50 and above who have experienced an involuntary job loss. Hazard models for returning to work and for exiting postdisplacement employment are estimated and used to examine work patterns for 10 years following a job loss. Our findings show that a job loss results in large and lasting effects on future employment probabilities. Four years after job losses at age 55, the employment rate of displaced workers remains 20 percentage points below the employment rate of similar nondisplaced workers.

The Intergenerational Effects of Compulsory Schooling

This article attempts to improve our understanding of the causal processes that contribute to intergenerational immobility by exploiting historical changes in compulsory schooling laws that affected the educational attainment of parents without affecting their innate abilities or endowments. We examine the influence of parental compulsory schooling on children’s grade‐for‐age using the 1960, 1970, and 1980 U.S. censuses. Our estimates indicate that a 1‐year increase in the education of either parent reduces the probability that a child repeats a grade by between 2 and 4 percentage points.

The Intergenerational Effects of Worker Displacement

This article uses variation induced by firm closures to explore the intergenerational effects of worker displacement using a Canadian panel of administrative data that follows more than 39,000 father‐son pairs from 1978 to 1999. We find that children whose fathers were displaced have annual earnings about 9% lower than similar children whose fathers did not experience an employment shock. They are also more likely to receive unemployment insurance and social assistance. The estimates are driven by the experiences of children whose family income was at the bottom of the income distribution.

What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision-Making

This paper provides an answer to an important empirical puzzle in the retirement literature: while most people know little about their own pension plans, retirement behavior is strongly affected by pension incentives. We combine administrative and self-reported pension data to measure the retirement response to actual and perceived financial incentives and document an important role for self-reported pension data in determining retirement behavior. Well-informed individuals are far more responsive to pension incentives than the average individual. Ill-informed individuals seem to respond systematically to their own misperceptions of pension incentives.

Poverty in America: Trends and Explanations

Despite robust growth in real per capita GDP over the last three decades, the U.S. poverty rate has changed very little. In an effort to better understand this disconnect, we document and quantify the relationship between poverty and four different factors that may affect poverty and its evolution over time: labor market opportunities, family structure, anti-poverty programs, and immigration. We find that the relationship between the macro-economy and poverty has weakened over time. Nevertheless, changes in labor market opportunities predict changes in the poverty rate rather well. We also find that changes in female labor supply should have reduced poverty, but was counteracted by an increase in the rate of female headship. Changes in the number and composition of immigrants and changes in the generosity of anti-poverty programs seem to have had little effect.

Do changes in pension incentives affect retirement? A longitudinal study of subjective retirement expectations

This paper investigates the responsiveness of individuals’ retirement decisions to forward-looking measures of pension accumulations. In contrast to previous research, we use within-person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations. We confirm that individuals do respond as expected to pension incentives, even when we control for individual fixed effects. However, the magnitude of these responses differs when estimated from models based on within-person versus cross-sectional variation: the inclusion of fixed effects reduces the response by about half.

How Does Job Loss Affect the Timing of Retirement

Abstract This paper estimates the extent to which reduced employment following job loss among older workers can be explained as a response to altered pension incentives and earnings opportunities. Using data from the Health and Retirement Study, we first examine how workers’ earnings, assets, pensions and the resulting financial incentive to retire are affected by job loss. We find important effects of job loss on the main financial components of workers’ incentive to retire. We then examine retirement behavior after job loss, controlling for these changed retirement incentives, along with any additional effects of displacement not captured by retirement incentives. We find that the observed increased rates of retirement among displaced workers go far beyond these purely financial considerations. Very little of the reduced employment among older job losers can be explained by changes in wages and pension-related retirement incentives. Other barriers to reemployment may be more important explanations for the low employment rates of recently displaced older workers.

The Economic Consequences of Absent Parents.

We examine the effects of family structure on economic resources, controlling for unobservable family characteristics. In the year following a divorce, family income falls by 41 percent and family food consumption falls by 18 percent. Six or more years later, the family income of the average child whose parent remains unmarried is 45 percent lower than it would have been if the divorce had not occurred. Marriage raises the long-run family income of children born to single parents by 45 percent. These estimates are substantially smaller than the losses that are implied by cross-sectional comparisons across family types.

Changes in Earnings Instability and Job Loss

This paper examines the contribution of job loss or displacement to increasing male earnings instability between 1970 and 1991. Earnings instability increased among both displaced and not-displaced men, so changes associated with job loss cannot fully explain rising instability. Changes in the incidence and consequences of job loss did, however, add substantially to growing earnings instability and to the overall variance of earnings. There is evidence that displacement substantially raised earnings volatility for several years after job loss. That effect, combined with increased numbers of recently displaced workers in the 1980s relative to the previous decade, contributed to rising overall earnings instability.