IDEAS home Printed from https://ideas.repec.org/a/oup/jeurec/v19y2021i5p2695-2736..html
   My bibliography  Save this article

Explaining Wage Losses After Job Displacement: Employer Size and Lost Firm Wage Premiums

Author

Listed:
  • Daniel Fackler
  • Steffen Mueller
  • Jens Stegmaier

Abstract

This paper investigates whether wage losses after job displacement are driven by lost firm wage premiums or worker productivity depreciations. We estimate losses in wages and firm wage premiums, the latter being measured as firm effects from a two-way fixed-effects wage decomposition. Using new German administrative data on displacements from small and large employers, we find that wage losses are to a large extent explained by losses in firm wage premiums and that premium losses are largely permanent. We show that losses strongly increase with pre-displacement employer size. This provides an explanation for large and persistent wage losses reported in previous displacement studies typically focusing on large employers, only.

Suggested Citation

  • Daniel Fackler & Steffen Mueller & Jens Stegmaier, 2021. "Explaining Wage Losses After Job Displacement: Employer Size and Lost Firm Wage Premiums," Journal of the European Economic Association, European Economic Association, vol. 19(5), pages 2695-2736.
    • Handle: RePEc:oup:jeurec:v:19:y:2021:i:5:p:2695-2736.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jeea/jvab022
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ines Helm & Alice Kuegler & Uta Schoenberg, 2023. "Displacement Effects in Manufacturing and Structural Change," RF Berlin - CReAM Discussion Paper Series 2313, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    2. Martins-Neto, Antonio & Cirera, Xavier & Coad, Alex, 2022. "Routine-biased technological change and employee outcomes after mass layoffs: Evidence from Brazil," MERIT Working Papers 2022-014, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Simon Woodcock, 2022. "The Determinants of Displaced Workers’ Wages: Sorting, Matching, Selection, and the Hartz Reforms," Discussion Papers dp22-04, Department of Economics, Simon Fraser University.
    4. Antoine Bertheau & Edoardo Maria Acabbi & Cristina Barceló & Andreas Gulyas & Stefano Lombardi & Raffaele Saggio, 2023. "The Unequal Consequences of Job Loss across Countries," American Economic Review: Insights, American Economic Association, vol. 5(3), pages 393-408, September.
    5. Arntz, Melanie & Ivanov, Boris & Pohlan, Laura, 2022. "Regional Structural Change and the Effects of Job Loss," IZA Discussion Papers 15313, Institute of Labor Economics (IZA).
    6. Daniel Fackler & Claus Schnabel & Jens Stegmaier, 2024. "Personnel adjustments during the Covid-19 pandemic: did co-determination make a difference?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 58(1), pages 1-10, December.
    7. Nils Braakmann & Wessel N. Vermeulen, 2023. "Do mass layoffs affect voting behaviour? Evidence from the UK," British Journal of Industrial Relations, London School of Economics, vol. 61(4), pages 922-950, December.
    8. Jon Ellingsen & Caroline Espegren, 2022. "Lost in transition? Earnings losses of displaced petroleum workers," Working Papers No 06/2022, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
    9. Serdar Birinci & Youngmin Park & Thomas Pugh & Kurt See, 2023. "Uncovering the Differences among Displaced Workers: Evidence from Canadian Job Separation Records," Working Papers 2023-022, Federal Reserve Bank of St. Louis, revised Oct 2023.
    10. Hälbig, Mirja & Mertens, Matthias & Müller, Steffen, 2023. "Minimum wages, productivity, and reallocation," IWH Discussion Papers 8/2023, Halle Institute for Economic Research (IWH).
    11. Srhoj, Stjepan & Kovač, Dejan & Shapiro, Jacob N. & Filer, Randall K., 2023. "The impact of delay: Evidence from formal out-of-court restructuring," Journal of Corporate Finance, Elsevier, vol. 78(C).
    12. Ben Ost & Weixiang Pan & Douglas A. Webber, 2023. "College Networks and Re-employment of Displaced Workers," Finance and Economics Discussion Series 2023-043, Board of Governors of the Federal Reserve System (U.S.).
    13. Woodcock, Simon D., 2023. "The determinants of displaced workers’ wages: Sorting, matching, selection, and the Hartz reforms," Journal of Econometrics, Elsevier, vol. 233(2), pages 568-595.
    14. Duan, Yige & Jost, Oskar & Jost, Ramona, 2022. "Beyond Lost Earnings: The Long-Term Impact of Job Displacement on Workers’ Commuting Behavior," IAB-Discussion Paper 202215, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    15. Ivan Lagrosa, 2022. "Income dynamics in dual labor markets," Working Papers wp2022_2209, CEMFI.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jeurec:v:19:y:2021:i:5:p:2695-2736.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/jeea .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.