scholarly journals Job Ladders and Earnings of Displaced Workers

2017 ◽  
Vol 9 (2) ◽  
pp. 1-31 ◽  
Author(s):  
Pawel Krolikowski
Keyword(s):  
Displaced Workers ◽  
Job Displacement ◽  
Wage Dispersion ◽  
Earnings Losses ◽  
Displaced Worker

Workers who suffer job displacement experience surprisingly large and persistent earnings losses. This paper proposes an explanation for this robust empirical puzzle in a model of search with a significant job ladder and increased separation rates for the recently hired. In addition to capturing the depth and persistence of displaced worker earnings losses, the model matches: employment-to-nonemployment and employer-to-employer probabilities by tenure; the empirical decomposition of earnings losses into reduced wages and employment; observed wage dispersion; and the distribution of wage changes around a nonemployment event. (JEL J31, J63, J64)

A Review of the Recent Empirical Literature on Displaced Workers

ILR Review ◽  
1996 ◽  
Vol 50 (1) ◽  
pp. 5-16 ◽  
Author(s):  
Bruce C. Fallick
Keyword(s):  
Demographic Characteristics ◽  
Displaced Workers ◽  
Economic Conditions ◽  
Empirical Literature ◽  
Job Displacement ◽  
Prior Performance ◽  
Earnings Losses ◽  
Economic Downturns ◽  
Advance Notice ◽  
The Difference

This article reviews the empirical literature on job displacement. Job displacement is widespread and strongly countercyclical (tending to peak during economic downturns), but concentrated in industries and states that are doing poorly, relative either to other industries and states or to their own prior performance. Displaced workers experience more nonemployment than do nondisplaced workers, but the difference fades after about four years. In contrast, earnings losses of displaced workers are large and persistent. Outcomes for all displaced workers are heavily influenced by broader economic conditions, and are affected very little by workers' demographic characteristics. The effects of advance notice are not yet clear.

scholarly journals Job Displacement Risk and the Cost of Business Cycles

2007 ◽  
Vol 97 (3) ◽  
pp. 664-686 ◽  
Author(s):  
Tom Krebs
Keyword(s):  
Quantitative Analysis ◽  
Theoretical Analysis ◽  
Business Cycles ◽  
Incomplete Markets ◽  
Displaced Workers ◽  
Job Displacement ◽  
Macroeconomic Model ◽  
Earnings Losses ◽  
The Cost

This paper analyzes the welfare costs of business cycles when workers face uninsurable job displacement risk. The paper uses a simple macroeconomic model with incomplete markets to show that cyclical variations in the long-term earnings losses of displaced workers can generate arbitrarily large cost of business cycles even if the variance of individual income changes is constant over the cycle. In addition to the theoretical analysis, this paper conducts a quantitative study of the cost of business cycles using empirical evidence on the long-term earnings losses of US workers. The quantitative analysis shows that realistic variations in job displacement risk generate sizable costs of business cycles, even though a second-moment analysis would suggest negligible costs. (JEL E21, E24, E32, J63)

Job Displacement and Earnings Loss: Evidence from the Displaced Worker Survey

ILR Review ◽  
1987 ◽  
Vol 41 (1) ◽  
pp. 17-29 ◽  
Author(s):  
Michael Podgursky ◽  
Paul Swaim
Keyword(s):  
Population Survey ◽  
Job Displacement ◽  
Full Time ◽  
Capital Investments ◽  
Earnings Losses ◽  
Special Supplement ◽  
Human Capital Investments ◽  
Displaced Worker ◽  
Using Data ◽  
Specific Human Capital

Using data from the Displaced Worker Survey, a special supplement to the January 1984 Current Population Survey, the authors estimate a model of reemployment earnings for workers displaced from full-time nonagricultural jobs between January 1979 and January 1984. Median losses for workers reemployed full-time were not large, but a sizable minority of that group—mostly workers with substantial specific human capital investments—experienced large and enduring earnings losses.

Earnings Losses and Unemployment of Displaced Workers in Germany

ILR Review ◽  
2001 ◽  
Vol 54 (3) ◽  
pp. 559 ◽  
Author(s):  
Kenneth A. Couch
Keyword(s):  
Displaced Workers ◽  
Earnings Losses

scholarly journals Two-Sided Learning with Applications to Labor Turnover and Worker Displacement

2008 ◽  
Vol 228 (5-6) ◽  
Author(s):  
Gerard A. Pfann ◽  
Daniel S. Hamermesh
Keyword(s):  
Dynamic Model ◽  
Job Loss ◽  
Recent Literature ◽  
Displaced Workers ◽  
Labor Turnover ◽  
Job Displacement ◽  
Worker Displacement ◽  
Value Of Learning ◽  
Role Of Information

SummaryWe make several extensions to the recent literature on job loss while modernizing the very early job-displacement literature. After constructing a dynamic model of two-sided learning between a firm and its workers, we estimate it using personnel data from Fokker Aircraft that cover the path of layoffs and quits through its bankruptcy in March 1996. We find that the firm learns about workers' loyalty (demonstrating the role of information in repeated cooperative principal- agent relationships), while workers do not learn (consistent with earlier empirical results on American workers). The type of data that we use also generates information on the value of learning and on whether and how the characteristics of workers who remain until the firm's death differ from those of all affected workers. It thus allows us to measure the increases in the firm's value from learning about its workers' behavior and to infer the extent of biases in estimating losses from displacement from samples restricted to displaced workers.

scholarly journals Geographic Mobility and the Costs of Job Loss

2015 ◽  
Vol 15 (4) ◽  
pp. 1793-1829 ◽  
Author(s):  
Nicholas A. Jolly
Keyword(s):  
Job Loss ◽  
Panel Study ◽  
Displaced Workers ◽  
Early Years ◽  
Geographic Mobility ◽  
Lower Probability ◽  
Income Dynamics ◽  
Earnings Losses ◽  
Loss Experience

Abstract This paper uses data from the 1968 through 1997 survey waves of the Panel Study of Income Dynamics to analyze how the long-term costs of job loss vary by a worker’s post-displacement migration status. Results from the analysis show that those individuals who move within the first 2 years after a job loss experience lower earnings losses, lower reductions in hours worked, and smaller increases in time unemployed when compared to a group of displaced workers who are not geographically mobile during the early years following this life event. Workers who move within the first 2 years after displacement face a lower probability of homeownership when compared to their non-mobile counterparts. However, this lower probability is short-lived.

scholarly journals Earnings Losses of Displaced Workers Revisited

2010 ◽  
Vol 100 (1) ◽  
pp. 572-589 ◽  
Author(s):  
Kenneth A Couch ◽  
Dana W Placzek
Keyword(s):  
Administrative Data ◽  
Unemployment Insurance ◽  
Fixed Effects ◽  
Panel Study ◽  
Displaced Workers ◽  
Income Dynamics ◽  
Matching Estimators ◽  
Earnings Losses ◽  
Random Growth ◽  
Mass Layoff

Earnings losses of Connecticut workers affected by mass layoff are calculated using administrative data. Estimated reductions are initially more than 30 percent and six years later, as much as 15 percent. The Connecticut estimates are smaller than comparable ones from Pennsylvania administrative data but similar to those from the Panel Study of Income Dynamics (PSID) and Department of Workforce Services (DWS). Earnings reductions in Connecticut and Pennsylvania are concentrated among Unemployment Insurance recipients. An unusually high proportion of Unemployment Insurance beneficiaries in Pennsylvania explains the larger estimated losses relative to other studies. Fixed-effects, random growth, and matching estimators produced similar earnings loss estimates suggesting each is relatively unbiased in this context.

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