Mortality, Mass-Layoffs, and Career Outcomes: An Analysis using Administrative Data
This paper uses administrative data on quarterly employment and earnings matched to death records
to estimate the effects of job displacement on mortality. We find that job displacement leads to a
15-20% increase in death rates during the following 20 years. If such increases were sustained
beyond this period, they would imply a loss in life expectancy of about 1.5 years for a worker
displaced at age 40. These results are robust to extensive controls for sorting and selection, and are
consistent with estimates of the effects of job loss on mortality pooling displaced workers and
stayers that are not affected by selective job displacement. To examine the channels through which
mass layoffs raise mortality, we exploit the panel nature of our data – covering over 15 years of
earnings – to analyze the correlation of long-run career outcomes, such as the mean and standard
deviation of earnings, with mortality at the individual and group level, something not possible with
typical data sets. Our findings suggest that factors correlated with a decrease in mean earnings and a
rise in standard deviation of earnings have the potential to explain an important fraction of the
effect of a job displacement on mortality.