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Lasting or Latent Scars? Swedish Evidence on the Long-Term Effects of Job Displacement

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Author Info

  • Marcus Eliason

    (CELMS (Centre for European Labour Market Studies), Department of Economics, G�teborg University)

  • Donald Storrie

    (European Foundation for the Improvement of Living and Working Conditions and CELMS, Department of Economics, G�teborg University)

Abstract

Recently improved Swedish register data have made it possible to remedy many weaknesses of previous research on displaced workers. Using linked employer-employee data, we identify all workers displaced in 1987, due to an establishment closure, and follow them over both a predisplacement period of 4 years and a postdisplacement period stretching until 1999. We find that the displaced workers suffer both earnings losses and worsened labor-market position not only during a transitory period of adjustment but also in the longer run. These longer-run effects seem to be driven by an increased sensitivity to subsequent macroeconomic shocks.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 24 (2006)
Issue (Month): 4 (October)
Pages: 831-856

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Handle: RePEc:ucp:jlabec:v:24:y:2006:i:4:p:831-856

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Web page: http://www.journals.uchicago.edu/JOLE/

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