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How do firms interpret a job loss? Evidence from the National Longitudinal Survey of Youth

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  • Stephen M. Kosovich

    (Stephen F. Austin State University)

Abstract

Empirical studies in the job displacement literature have found that workers face significant earnings losses on average, when they are permanently displaced from jobs. Previous research also suggests that the costliness of job loss varies widely. Gibbons and Katz (1991) develop and test a theoretical model in which layoffs provide the market with information concerning the quality of laid off workers, while plant and firm closings do not. Using data from the National Longitudinal Survey of Youth, this paper tests a model that describes how firms can use additional information about job losses to determine worker quality. The results suggest that workers face the most stigma from very recent and uncommon job losses.

Suggested Citation

  • Stephen M. Kosovich, 2009. "How do firms interpret a job loss? Evidence from the National Longitudinal Survey of Youth," Economics Bulletin, AccessEcon, vol. 29(2), pages 1070-1086.
    • Handle: RePEc:ebl:ecbull:eb-09-00199
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    labor economics; job loss; job displacement; unemployment; layoffs;
    All these keywords.

    JEL classification:

    • J0 - Labor and Demographic Economics - - General

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