Post-Layoff Earnings among Semiconductor Workers

This study uses administrative data from California's unemployment insurance program to analyze the post-layoff earnings of displaced and recalled workers in Silicon Valley's semiconductor industry between 1984 and 1987. The authors find losses from inter-sectoral displacement that are consistent with losses found in other studies of job dislocation. The results show, however, that displaced workers who found work within the high-technology sector had earnings similar to those of recalled workers, a finding at odds with theories that emphasize either firm-specific human capital or internal labor markets. These results are instead consistent with the presence of both industry-specific human capital and efficiency wages in the high-technology sector.