The effect of involuntary job loss on smoking intensity and relapse.

AIMS: To assess the impact of involuntary job loss due to plant closure or layoff on relapse to smoking and smoking intensity among older workers. DESIGN, PARTICIPANTS, SAMPLE: Data come from the Health and Retirement Study, a nationally representative survey of older Americans aged 51-61 in 1991 followed every 2 years beginning in 1992. The 3052 participants who were working at the initial wave and had any history of smoking comprise the main sample. METHODS: Primary outcomes are smoking relapse at wave 2 (1994) among baseline former smokers, and smoking quantity at wave 2 among baseline current smokers. As reported at the wave 2 follow-up, 6.8% of the sample experienced an involuntary job loss between waves 1 and 2. FINDINGS: Older workers have over two times greater odds of relapse subsequent to involuntary job loss than those who did not. Further, those who were current smokers prior to displacement that did not obtain new employment were found to be smoking more cigarettes, on average, post-job loss. CONCLUSIONS: The stress of job loss, along with other significant changes associated with leaving one's job, which would tend to increase cigarette consumption, must outweigh the financial hardship which would tend to reduce consumption. This highlights job loss as an important health risk factor for older smokers.

The impact of late career job loss on myocardial infarction and stroke: a 10 year follow up using the health and retirement survey.

BACKGROUND: Involuntary job loss is a major life event associated with social, economic, behavioural, and health outcomes, for which older workers are at elevated risk. OBJECTIVE: To assess the 10 year risk of myocardial infarction (MI) and stroke associated with involuntary job loss among workers over 50 years of age. METHODS: Analysing data from the nationally representative US Health and Retirement Survey (HRS), Cox proportional hazards analysis was used to estimate whether workers who suffered involuntary job loss were at higher risk for subsequent MI and stroke than individuals who continued to work. The sample included 4301 individuals who were employed at the 1992 study baseline. RESULTS: Over the 10 year study frame, 582 individuals (13.5% of the sample) experienced involuntary job loss. After controlling for established predictors of the outcomes, displaced workers had a more than twofold increase in the risk of subsequent MI (hazard ratio (HR) = 2.48; 95% confidence interval (CI) = 1.49 to 4.14) and stroke (HR = 2.43; 95% CI = 1.18 to 4.98) relative to working persons. CONCLUSION: Results suggest that the true costs of late career unemployment exceed financial deprivation, and include substantial health consequences. Physicians who treat individuals who lose jobs as they near retirement should consider the loss of employment a potential risk factor for adverse vascular health changes. Policy makers and programme planners should also be aware of the risks of job loss, so that programmatic interventions can be designed and implemented to ease the multiple burdens of joblessness.

Essays on Job Search and Labor Market Dynamics

This dissertation consists of three separate essays on job search and labor market dynamics. In the first essay, “The Impact of Labor Market Conditions on Job Creation: Evidence from Firm Level Data”, I study how much changes in labor market conditions reduce employment fluctuations over the business cycle. Changes in labor market conditions make hiring more expensive during expansions and cheaper during recessions, creating counter-cyclical incentives for job creation. I estimate firm level elasticities of labor demand with respect to changes in labor market conditions, considering two margins: changes in labor market tightness and changes in wages. Using employer-employee matched data from Brazil, I find that all firms are more sensitive to changes in wages rather than labor market tightness, and there is substantial heterogeneity in labor demand elasticity across regions. Based on these results, I demonstrate that changes in labor market conditions reduce the variance of employment growth over the business cycle by 20% in a median region, and this effect is equally driven by changes along each margin. Moreover, I show that the magnitude of the effect of labor market conditions on employment growth can be significantly affected by economic policy. In particular, I document that the rapid growth of the national minimum wages in Brazil in 1997-2010 amplified the impact of the change in labor market conditions during local expansions and diminished this impact during local recessions.

In the second essay, “A Framework for Estimating Persistence of Local Labor

Demand Shocks”, I propose a decomposition which allows me to study the persistence of local labor demand shocks. Persistence of labor demand shocks varies across industries, and the incidence of shocks in a region depends on the regional industrial composition. As a result, less diverse regions are more likely to experience deeper shocks, but not necessarily more long lasting shocks. Building on this idea, I propose a decomposition of local labor demand shocks into idiosyncratic location shocks and nationwide industry shocks and estimate the variance and the persistence of these shocks using the Quarterly Census of Employment and Wages (QCEW) in 1990-2013.

In the third essay, “Conditional Choice Probability Estimation of Continuous- Time Job Search Models”, co-authored with Peter Arcidiacono and Arnaud Maurel, we propose a novel, computationally feasible method of estimating non-stationary job search models. Non-stationary job search models arise in many applications, where policy change can be anticipated by the workers. The most prominent example of such policy is the expiration of unemployment benefits. However, estimating these models still poses a considerable computational challenge, because of the need to solve a differential equation numerically at each step of the optimization routine. We overcome this challenge by adopting conditional choice probability methods, widely used in dynamic discrete choice literature, to job search models and show how the hazard rate out of unemployment and the distribution of the accepted wages, which can be estimated in many datasets, can be used to infer the value of unemployment. We demonstrate how to apply our method by analyzing the effect of the unemployment benefit expiration on duration of unemployment using the data from the Survey of Income and Program Participation (SIPP) in 1996-2007.