Abstract
This article compares the stable job fares for black and white workers following the shock of unemployment. Use from Continuous work history samplethis analysis compares the income trajectory of black and white workers displaced during three recessions (1990-1991; 2000-2001; 2008-2009) with the trajectory of non-placed workers of the same race.
The paper found:
- The income of displaced workers has dropped significantly relative to counterfactuality regardless of race.
- The income rate of black displaced people fell (“ultrasound scars”) immediately after displacement, but in the long run, the same percentage decreased.
- However, black workers still face disadvantages because even black workers who were not placed had a slower income growth than white workers, a pattern that did not improve over time.
The meaning of the policy is:
- The gradual rate of social security benefits helps mitigate the lifelong income shock caused by unemployment.
- This progress is particularly important for Black workers, as their displacement and immediate loss of income is caused.
- Similarly, keeping the early eligibility age at 62 is a protection of the long-term employment rate of displaced workers.
