Income in the Off-Season: Household Adaptation to Yearly Work Interruptions

Upjohn Institute Working Paper 20-337

57 Pages Posted: 27 Jan 2021

See all articles by John M. Coglianese

John M. Coglianese

Board of Governors of the Federal Reserve System

Brendan M. Price

Board of Governors of the Federal Reserve System

Multiple version iconThere are 2 versions of this paper

Date Written: November 15, 2020

Abstract

Joblessness is highly seasonal. To analyze how households adapt to seasonal joblessness, we introduce a measure of seasonal work interruptions premised on the idea that a seasonal worker will tend to exit employment around the same time each year. We show that an excess share of prime-age U.S. workers experience recurrent separations spaced exactly 12 months apart. These separations coincide with aggregate seasonal downturns and are concentrated in seasonally volatile industries. Examining workers most prone to seasonal work interruptions, we find that these workers incur large earnings losses during the off-season. Lost earnings are 1) driven mainly by repeated separations from the same employer, 2) not recouped at other firms, 3) partly offset by unemployment benefits, and 4) amplified by concurrent drops in partners’ earnings. On net, household income falls by about $0.80 for each $1 lost in own earnings.

Keywords: seasonality, seasonal employment, job loss, household income, household labor dynamics, unemployment, unemployment insurance

JEL Classification: D10, E32, J63

Suggested Citation

Coglianese, John M. and Price, Brendan M., Income in the Off-Season: Household Adaptation to Yearly Work Interruptions (November 15, 2020). Upjohn Institute Working Paper 20-337 , Available at SSRN: https://ssrn.com/abstract=3742823 or http://dx.doi.org/10.2139/ssrn.3742823

John M. Coglianese

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

HOME PAGE: http://https://www.federalreserve.gov/econres/john-m-coglianese.htm

Brendan M. Price (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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