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What Happens to Wages after Displacement?

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  • David S. Kaplan

    ()

  • Raymond Robertson

    ()

  • Gabriel Martínez González

Abstract

Faced with limited resources, policymakers need to know when and where to target support for displaced workers. The academic literature offers little support, presenting wide-ranging results with no consistent explanation for the observed differences in wages after workers are displaced. In this paper, we demonstrate that the heterogeneity found in the literature is consistent with varying market conditions. The results suggest that support for displaced workers can be more efficiently allocated by considering the timing and location of displacement.

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Bibliographic Info

Article provided by LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION in its journal JOURNAL OF LACEA ECONOMIA.

Volume (Year): (2005)
Issue (Month): ()
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Handle: RePEc:col:000425:008661

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Related research

Keywords: Displaced Workers; Mexico;

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References

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  1. Robertson, Raymond & Dutkowsky, Donald H., 2002. "Labor adjustment costs in a destination country: the case of Mexico," Journal of Development Economics, Elsevier, Elsevier, vol. 67(1), pages 29-54, February.
  2. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, Elsevier, vol. 42(3-4), pages 371-393, May.
  3. Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 742-764, September.
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  5. William J. Carrington, 1993. "Wage Losses for Displaced Workers: Is It Really the Firm That Matters?," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 28(3), pages 435-462.
  6. Ann Huff Stevens, 1995. "Long-Term Effects of Job Displacement: Evidence from the Panel Study of Income Dynamics," NBER Working Papers 5343, National Bureau of Economic Research, Inc.
  7. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, Oxford University Press, vol. 46(4), pages 537-62, October.
  8. Gordon H. Hanson, 1998. "North American Economic Integration and Industry Location," NBER Working Papers 6587, National Bureau of Economic Research, Inc.
  9. Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues, Federal Reserve Bank of Chicago 91-5, Federal Reserve Bank of Chicago.
  10. Hamermesh, Daniel S, 1989. "Labor Demand and the Structure of Adjustment Costs," American Economic Review, American Economic Association, American Economic Association, vol. 79(4), pages 674-89, September.
  11. Naercio Menezes-Filho, 2004. "The Costs of Displacement in Brazil," Econometric Society 2004 Latin American Meetings, Econometric Society 200, Econometric Society.
  12. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992. "Earnings losses of displaced workers," Working Paper Series, Macroeconomic Issues, Federal Reserve Bank of Chicago 92-28, Federal Reserve Bank of Chicago.
  13. Revenga, Ana & Riboud, Michelle & Tan, Hong, 1994. "The Impact of Mexico's Retraining Program on Employment and Wages," World Bank Economic Review, World Bank Group, World Bank Group, vol. 8(2), pages 247-77, May.
  14. Burda, Michael C. & Mertens, Antje, 2001. "Estimating wage losses of displaced workers in Germany," Labour Economics, Elsevier, Elsevier, vol. 8(1), pages 15-41, January.
  15. Kenneth A. Couch, 2001. "Earnings losses and unemployment of displaced workers in Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 54(3), pages 559-572, April.
  16. Panagides, Alexis & Patrinos, Harry Anthony & DEC, 1994. "Union - nonunion wage differentials in the developing world : a case study of Mexico," Policy Research Working Paper Series, The World Bank 1269, The World Bank.
  17. Sara de la Rica, 1995. "Evidence of Preseparation Earnings Losses in the Displaced Worker Survey," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 30(3), pages 610-621.
  18. McLaughlin, Kenneth J, 1991. "A Theory of Quits and Layoffs with Efficient Turnover," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(1), pages 1-29, February.
  19. Hashimoto, Masanori, 1979. "Bonus Payments, on-the-Job Training, and Lifetime Employment in Japan," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(5), pages 1086-1104, October.
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  21. Marie Howland & George E. Peterson, 1988. "Labor market conditions and the reemployment of displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 42(1), pages 109-122, October.
  22. Gustavo Gonzaga, 2003. "Labor Turnover and Labor Legislation in Brazil," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  23. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, American Economic Association, vol. 81(1), pages 319-24, March.
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  25. Bruce C. Fallick, 1996. "A review of the recent empirical literature on displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
  26. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 12(1), pages 115-136, Winter.
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  28. Pfann, Gerard A & Ben Kriechel, 2003. "Heterogeneity among Displaced Workers," Royal Economic Society Annual Conference 2003, Royal Economic Society 164, Royal Economic Society.
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Citations

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Cited by:
  1. David Kaplan & Eduardo Piedra & Enrique Seira, 2006. "Are Burdensome Registration Procedures an Important Barrier on Firm Creation? Evidence from Mexico," Discussion Papers, Stanford Institute for Economic Policy Research 06-013, Stanford Institute for Economic Policy Research.
  2. Jukka Appelqvist, 2007. "Wage and Earnings Losses of Displaced Workers in Finland," Discussion Papers, Government Institute for Economic Research Finland (VATT) 422, Government Institute for Economic Research Finland (VATT).
  3. Verónica Amarante & Rodrigo Arim & Andrés Dean, 2012. "The effects of being out of the labor market on subsequent wages: evidence for Uruguay," Documentos de Trabajo (working papers), Instituto de Economía - IECON 12-10, Instituto de Economía - IECON.
  4. Menezes Filho, N. A. & Menezes Filho, N. A., 2007. "The Structure of Worker Compensation in Brazil, With a Comparison to France and the United States," Insper Working Papers, Insper Working Paper, Insper Instituto de Ensino e Pesquisa wpe_78, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
  5. Filhoz, Naercio Aquino Menezes & Muendler, Marc-Andreas & Ramey, Garey, 2005. "The Structure of Worker Compensation in Brazil, With a Comparison to France and the United States¤," University of California at San Diego, Economics Working Paper Series, Department of Economics, UC San Diego qt55q3h7nj, Department of Economics, UC San Diego.
  6. Kaplan, David S. & Gonzalez, Gabriel Martinez & Robertson, Raymond, 2007. "Mexican employment dynamics : evidence from matched firm-worker data," Policy Research Working Paper Series, The World Bank 4433, The World Bank.
  7. Couch, Kenneth A. & Jolly, Nicholas A. & Placzek, Dana W., 2011. "Earnings losses of displaced workers and the business cycle: An analysis with administrative data," Economics Letters, Elsevier, Elsevier, vol. 111(1), pages 16-19, April.
  8. Kaplan, David S. & Piedra, Eduardo & Seira, Enrique, 2007. "Entry regulation and business start-ups : evidence from Mexico," Policy Research Working Paper Series, The World Bank 4322, The World Bank.
  9. Nicolas Melissas, 2007. "The Trader, the Market Maker, his Guru and her Information," Working Papers, Centro de Investigacion Economica, ITAM 0702, Centro de Investigacion Economica, ITAM.
  10. Filho, Naerico Aquino Menezes & Muendler, Marc-Andreas & Ramey, Garey, 2006. "The Structure of Worker Compensation in Brazil, With a Comparison to France and the United States," University of California at San Diego, Economics Working Paper Series, Department of Economics, UC San Diego qt8pr105rg, Department of Economics, UC San Diego.

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