Vulnerable workers, workers who have recently experienced a shock that could adversely affect their labor market prospects, experience large, long-lasting earnings losses – on average. This dissertation investigates the mechanisms behind the losses of three groups of vulnerable workers and the role of public policy in mitigating these losses.
In the first essay, I identify which displaced workers, workers who lose their job as a result of a firm or plant closing, are the most vulnerable. I find that a worker’s duration of joblessness depends much more on conditions within that worker’s occupation than conditions within that worker’s industry. This suggests a worker’s vulnerability is a function of their skills and less related to the goods and services they were previously producing.
In the second essay, my collaborators and I estimate the causal impacts of benefits in California’s Paid Family Leave program on a second group of vulnerable workers: new mothers. We find no evidence that a higher weekly benefit amount increases leave duration or leads to adverse future labor market outcomes for mothers with earnings near the maximum benefit threshold.
In the third essay, my collaborators and I find strong evidence that Disability Insurance and Paid Family Leave program take-up is substantially higher in firms with high earnings premiums. Our results suggest that changes in firm behavior have the potential to impact social insurance use and thus reduce an important dimension of inequality in America.