Post-Job Loss Unemployment Duration for Young Workers

Wrongfully terminated workers usually experience a period of unemployment prior to finding a subsequent job which may or may not fully mitigate their earnings loss. This post-termination unemployment duration constitutes a portion of the earnings loss horizon. Although the U.S. Bureau of Labor Statistics publishes unemployment durations, taken from the U.S. Current Population Survey, the estimates are downward-biased because they include workers that are still unemployed. By not considering complete spells of unemployment, these unemployment durations are of little use to forensic economists. This research provides post-job loss unemployment durations for both laid-off and terminated young workers based on the 1979 National Longitudinal Survey of Youth. By using longitudinal data, this research captures complete spells of unemployment which can be used by forensic economists when estimating lost earnings horizons in wrongful termination cases. The unemployment durations found in this paper advance the triangle of loss method for calculating lost earnings in wrongful termination cases by providing guidance for determining when to begin mitigation earnings. This research also offers empirical support for tailoring economic loss horizons to plaintiffs based on socio- economic characteristics. The following socio-economic characteristics were found to be statistically significant for both laid-off and terminated respondents: age, race, education, and local unemployment rate.