Africa Institute for Research in Economics and Social Sciences (AIRESS) organizes a seminar on Thursday, Feberuary 09th at 12:30 p.m (GMT+1) at Mohammed VI Polytechnic University - Rabat Campus (E-V1-01), under the theme ''Age and the Cost of Job Loss''.
Our guest speaker for this event is Mehdi Bartal, Assistant Professor at FGSES.
Job displacement is a source of sizable and persistent earnings losses. A widespread belief among labor economists is that these losses increase with age at the time of displacement. Recent empirical studies stress the severity of job loss episodes early in the career and show that the cost associated with displacement instead exhibits a U shape with age. We show that a simple model of search with human capital accumulation and age-dependent risk of skill obsolescence can rationalize the life cycle pattern of earnings losses observed in the US. A full model with firm heterogeneity, risk-averse workers and precautionary savings does not fundamentally change the results. For younger workers, earnings losses reflect missed wage growth opportunities whereas for older workers they are driven by skill obsolescence.