Reduction in income after a layoff can follow you for years

If you're unemployed, don't expect your next job to pay as well as your last job. And expect it to take years, if ever, for your salary to bounce back after a layoff. That's the bad news in a recent New York Times story that cites a working paper by an economics professor at Columbia University.

Being laid off during a recession makes it more difficult for workers to see their earnings bounce back than if they were laid off in better times, the Times reported. Income reduction can last for as long as two decades for people let go in a recession, economists said.

"On average, most workers do not recover their old annual earnings," said Til von Wachter, the Columbia University economics professor who, with two other economists, examined the long-term earnings of workers who lost their jobs in the recession of the early 1980s.