A large literature has documented that displaced workers suffer substantial losses in the labor market. Economic theory however suggests that these costs may not be confined to the displaced worker but also affect other family members. In this paper, we use administrative data of all workers and firms in Finland matched to mortality statistics to quantify the effects of job loss on spousal mortality. For the empirical analysis, we use an event study approach comparing workers who got displaced due to a plant closure in Finland’s great recession that followed the collapse of the Soviet Union to workers who did not get displaced in a plant closure. We find that the mortality risk of job loss is distributed asymmetrically across genders: if a man loses his job, both spouses suffer a higher risk of dying. In contrast, if the woman loses her job, we find no increase in mortality for either spouse. Exploring the mechanisms underlying the asymmetric response, we find that income losses are larger in absolute terms after a male job loss. In contrast, labor supply responses of spouses seem to play only a minor role.

Joint with Christina Gathmann and Robin Stitzing.