IDEAS home Printed from https://ideas.repec.org/p/bny/wpaper/0109.html
   My bibliography  Save this paper

Lost in transition? Earnings losses of displaced petroleum workers

Author

Listed:
  • Jon Ellingsen
  • Caroline Espegren

Abstract

We estimate the earnings losses of displaced petroleum workers using a matched employer-employee longitudinal data set from Norway, coupled with an event-study framework of the oil price drop in 2014. Displacement leads to sizable and persistent earnings losses, and the magnitudes are particularly large for petroleum workers moving to other industries. More importantly, we document that almost 70 percent of the earnings losses can be attributed to lost industry-specific earnings premiums caused by workers moving from an industry characterized by large resource rents. In contrast, worker-industry match effects are negligible.

Suggested Citation

  • 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.
    • Handle: RePEc:bny:wpaper:0109
    as

    Download full text from publisher

    File URL: https://hdl.handle.net/11250/3035432
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Philip Jung & Moritz Kuhn, 2019. "Earnings Losses and Labor Mobility Over the Life Cycle," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 678-724.
    2. William J. Carrington & Bruce Fallick, 2017. "Why Do Earnings Fall with Job Displacement?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 688-722, October.
    3. Goodman-Bacon, Andrew, 2021. "Difference-in-differences with variation in treatment timing," Journal of Econometrics, Elsevier, vol. 225(2), pages 254-277.
    4. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2021. "Adjusting to Globalization in Germany," Journal of Labor Economics, University of Chicago Press, vol. 39(1), pages 263-302.
    5. Pedro Raposo & Pedro Portugal & Anabela Carneiro, 2021. "The Sources of the Wage Losses of Displaced Workers: The Role of the Reallocation of Workers into Firms, Matches, and Job Titles," Journal of Human Resources, University of Wisconsin Press, vol. 56(3), pages 786-820.
    6. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    7. Jarosch, Gregor, 2021. "Searching for Job Security and the Consequences of Job Loss," CEPR Discussion Papers 15814, C.E.P.R. Discussion Papers.
    8. Clément de Chaisemartin & Xavier D'Haultfœuille, 2020. "Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects," American Economic Review, American Economic Association, vol. 110(9), pages 2964-2996, September.
    9. Woodcock, Simon D., 2008. "Wage differentials in the presence of unobserved worker, firm, and match heterogeneity," Labour Economics, Elsevier, vol. 15(4), pages 771-793, August.
    10. Henry S. Farber, 1997. "The Changing Face of Job Loss in the United States, 1981-1995," Working Papers 761, Princeton University, Department of Economics, Industrial Relations Section..
    11. Bjørnland, Hilde C. & Thorsrud, Leif Anders & Torvik, Ragnar, 2019. "Dutch disease dynamics reconsidered," European Economic Review, Elsevier, vol. 119(C), pages 411-433.
    12. Andrews, M.J. & Gill, L. & Schank, T. & Upward, R., 2012. "High wage workers match with high wage firms: Clear evidence of the effects of limited mobility bias," Economics Letters, Elsevier, vol. 117(3), pages 824-827.
    13. Pawel Krolikowski, 2017. "Job Ladders and Earnings of Displaced Workers," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(2), pages 1-31, April.
    14. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    15. Andreas Gulyas & Krzysztof Pytka, 2019. "Understanding the Sources of Earnings Losses After Job Displacement: A Machine-Learning Approach," CRC TR 224 Discussion Paper Series crctr224_2019_131, University of Bonn and University of Mannheim, Germany.
    16. Clément de Chaisemartin & Xavier D’Haultfœuille, 2023. "Two-way fixed effects and differences-in-differences with heterogeneous treatment effects: a survey," The Econometrics Journal, Royal Economic Society, vol. 26(3), pages 1-30.
    17. Henry S. Farber, 2015. "Job Loss in the Great Recession and its Aftermath: U.S. Evidence from the Displaced Workers Survey," Working Papers 589, Princeton University, Department of Economics, Industrial Relations Section..
    18. Steven J. Davis & Till Von Wachter, 2011. "Recessions and the Costs of Job Loss," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 1-72.
    19. Alan Carruth & William Collier & Andy Dickerson, 2004. "Inter‐industry Wage Differences and Individual Heterogeneity," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(5), pages 811-846, December.
    20. Parent, Daniel, 2000. "Industry-Specific Capital and the Wage Profile: Evidence from the National Longitudinal Survey of Youth and the Panel Study of Income Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 306-323, April.
    21. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    22. Kenneth A. Couch & Dana W. Placzek, 2010. "Earnings Losses of Displaced Workers Revisited," American Economic Review, American Economic Association, vol. 100(1), pages 572-589, March.
    23. W. Reed Walker, 2013. "The Transitional Costs of Sectoral Reallocation: Evidence From the Clean Air Act and the Workforce," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(4), pages 1787-1835.
    24. 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.
    25. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    26. Philip Jung & Moritz Kuhn, 2019. "Correction to: Earnings Losses and Labor Mobility Over the Life Cycle," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 990-990.
    27. Marta Lachowska & Alexandre Mas & Stephen A. Woodbury, 2020. "Sources of Displaced Workers' Long-Term Earnings Losses," American Economic Review, American Economic Association, vol. 110(10), pages 3231-3266, October.
    28. Blien, Uwe & Dauth, Wolfgang & Roth, Duncan H.W., 2021. "Occupational routine intensity and the costs of job loss: evidence from mass layoffs," Labour Economics, Elsevier, vol. 68(C).
    29. Henry S. Farber, 1993. "The Incidence and Costs of Job Loss: 1982-1991," Working Papers 688, Princeton University, Department of Economics, Industrial Relations Section..
    30. Seim, David, 2019. "On the incidence and effects of job displacement: Evidence from Sweden," Labour Economics, Elsevier, vol. 57(C), pages 131-145.
    31. Johannes F. Schmieder & Till von Wachter & Jörg Heining, 2023. "The Costs of Job Displacement over the Business Cycle and Its Sources: Evidence from Germany," American Economic Review, American Economic Association, vol. 113(5), pages 1208-1254, May.
    32. Gregor Jarosch, 2021. "Searching for Job Security and the Consequences of Job Loss," NBER Working Papers 28481, National Bureau of Economic Research, Inc.
    33. Henry S. Farber, 1997. "The Changing Face of Job Loss in the United States, 1981-1995," Working Papers 761, Princeton University, Department of Economics, Industrial Relations Section..
    34. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 17(Nov), pages 2-20.
    35. Farber, Henry S, 2015. "Job Loss in the Great Recession and its Aftermath: U.S. Evidence from the Displaced Workers Survey," IZA Discussion Papers 9069, Institute of Labor Economics (IZA).
    36. Stevens, Ann Huff, 1997. "Persistent Effects of Job Displacement: The Importance of Multiple Job Losses," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 165-188, January.
    37. Athey, Susan & Imbens, Guido W., 2022. "Design-based analysis in Difference-In-Differences settings with staggered adoption," Journal of Econometrics, Elsevier, vol. 226(1), pages 62-79.
    38. Henry S. Farber, 2017. "Employment, Hours, and Earnings Consequences of Job Loss: US Evidence from the Displaced Workers Survey," Journal of Labor Economics, University of Chicago Press, vol. 35(S1), pages 235-272.
    39. Henry S. Farber, 1997. "The Changing Face of Job Loss in the United States, 1981-1995," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1997 Micr), pages 55-142.
    40. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-677, October.
    41. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    42. Henry S. Farber, 1993. "The Incidence and Costs of Job Loss: 1982-91," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1 Microec), pages 73-132.
    43. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    44. Topel, Robert, 1990. "Specific capital and unemployment: Measuring the costs and consequences of job loss," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 33(1), pages 181-214, January.
    45. Henry S. Farber, 1993. "The Incidence and Costs of Job Loss: 1982-1991," Working Papers 688, Princeton University, Department of Economics, Industrial Relations Section..
    46. Bruce C. Fallick, 1996. "A Review of the Recent Empirical Literature on Displaced Workers," ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
    47. William J. Carrington, 1993. "Wage Losses for Displaced Workers: Is It Really the Firm That Matters?," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 435-462.
    48. Henry S. Farber, 2015. "Job Loss in the Great Recession and its Aftermath: U.S. Evidence from the Displaced Workers Survey," NBER Working Papers 21216, National Bureau of Economic Research, Inc.
    49. Michael Podgursky & Paul Swaim, 1987. "Job Displacement and Earnings Loss: Evidence from the Displaced Worker Survey," ILR Review, Cornell University, ILR School, vol. 41(1), pages 17-29, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. William J. Carrington & Bruce Fallick, 2017. "Why Do Earnings Fall with Job Displacement?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 688-722, October.
    3. Ortego-Marti, Victor, 2017. "Loss of skill during unemployment and TFP differences across countries," European Economic Review, Elsevier, vol. 100(C), pages 215-235.
    4. Seim, David, 2019. "On the incidence and effects of job displacement: Evidence from Sweden," Labour Economics, Elsevier, vol. 57(C), pages 131-145.
    5. Fella, Giulio & Audoly, Richard & De Pace, Federica, 2022. "Job Ladder, Human Capital, and the Cost of Job Loss," CEPR Discussion Papers 17746, C.E.P.R. Discussion Papers.
    6. 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.
    7. den Haan, Wouter J. & Ramey, Garey & Watson, Joel, 2000. "Job destruction and the experiences of displaced workers," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 87-128, June.
    8. Anja Deelen & Marloes de Graaf-Zijl & Wiljan van den Berge, 2018. "Labour market effects of job displacement for prime-age and older workers," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-30, December.
    9. Fackler, Daniel & Müller, Steffen & Stegmaier, Jens, 2017. "Explaining wage losses after job displacement: Employer size and lost firm rents," IWH Discussion Papers 32/2017, Halle Institute for Economic Research (IWH).
    10. Henry S. Farber, 2016. "Employment, Hours and Earnings Consequences of Job Loss: U.S. Evidence from the Displaced Workers Survey," Working Papers 589a, Princeton University, Department of Economics, Industrial Relations Section..
    11. Andreas Gulyas & Krzysztof Pytka, 2019. "Understanding the Sources of Earnings Losses After Job Displacement: A Machine-Learning Approach," CRC TR 224 Discussion Paper Series crctr224_2019_131, University of Bonn and University of Mannheim, Germany.
    12. Abbring, J.H. & van den Berg, G. & Gautier, P.A. & van Lomwel, A.G.C. & van Ours, J.C. & Ruhm, C.J., 1998. "Displaced Workers in The United States and The Netherlands," Discussion Paper 1998-96, Tilburg University, Center for Economic Research.
    13. Brendan Moore & Judith Scott-Clayton, 2019. "The Firm's Role in Displaced Workers' Earnings Losses," NBER Working Papers 26525, National Bureau of Economic Research, Inc.
    14. 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.
    15. Anja Deelen & Marloes de Graaf-Zijl & Wiljan van den Berge, 2018. "Labour market effects of job displacement for prime-age and older workers," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-30, December.
    16. J. Meekes & W.H.J. Hassink, 2016. "The role of the housing market in workers’ resilience to job displacement after firm bankruptcy," Working Papers 16-10, Utrecht School of Economics.
    17. Katharine G. Abraham & John Haltiwanger & Kristin Sandusky & James R. Spletzer, 2019. "The Consequences of Long-Term Unemployment: Evidence from Linked Survey and Administrative Data," ILR Review, Cornell University, ILR School, vol. 72(2), pages 266-299, March.
    18. Farber, Henry S, 2015. "Job Loss in the Great Recession and its Aftermath: U.S. Evidence from the Displaced Workers Survey," IZA Discussion Papers 9069, Institute of Labor Economics (IZA).
    19. Henry S. Farber, 2015. "Job Loss in the Great Recession and its Aftermath: U.S. Evidence from the Displaced Workers Survey," Working Papers 589, Princeton University, Department of Economics, Industrial Relations Section..
    20. Serdar Birinci & Youngmin Park & Thomas Pugh & Kurt See, 2023. "Uncovering the Differences Among Displaced Workers: Evidence from Canadian Job Separation Records," Staff Working Papers 23-55, Bank of Canada.

    More about this item

    Keywords

    Dutch disease; Resource Movements; Difference-in-Differences; Labor mobility; Displaced;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:bny:wpaper:0109. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Helene Olsen (email available below). General contact details of provider: https://edirc.repec.org/data/cambino.html .

    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.