Job displacement and labor market outcomes by skill level
AbstractThis paper investigates the effects of displacement on outcomes such as annual earnings, unemployment, wages and hours worked. It relies on previously unexplored administrative data on all displaced workers in Sweden in 2002, 2003 and 2004 which are linked to employer-employee matched data at the individual level. By linking the data to military enlistment records, the paper assesses the selection into displacement and finds that workers with low cognitive and noncognitive skills are significantly more likely to be displaced than high-skilled workers. The analysis of displacement effects shows evidence of large and long-lasting welfare costs from displacement. Moreover, studying the heterogenous impacts of job displacement in terms of cognitive and noncognitive skills reveals that although workers with high skills fare better than low-skilled workers in absolute terms, there are no significant differences in the recovery rates between skill groups. Finally, by using administrative data on displacements, it is possible to assess quantitatively the bias that results from not being able to separate quits from layoffs in earlier studies
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bank of Estonia in its series Bank of Estonia Working Papers with number wp2012-4.
Date of creation: 03 Dec 2012
Date of revision:
Postal: Estonia bld. 13, 15095 Tallinn, ESTONIA
Find related papers by JEL classification:
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-15 (All new papers)
- NEP-EUR-2012-12-15 (Microeconomic European Issues)
- NEP-LAB-2012-12-15 (Labour Economics)
- NEP-LMA-2012-12-15 (Labor Markets - Supply, Demand, & Wages)
- NEP-NEU-2012-12-15 (Neuroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
- Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992.
"Earnings losses of displaced workers,"
Working Paper Series, Macroeconomic Issues
92-28, Federal Reserve Bank of Chicago.
- Henry Farber, 2003. "Job Loss in the United States, 1981-2001," NBER Working Papers 9707, National Bureau of Economic Research, Inc.
- Henry S. Farber, 2003. "Job Loss in the United States, 1981-2001," Working Papers 850, Princeton University, Department of Economics, Industrial Relations Section..
- James J. Heckman & Jora Stixrud & Sergio Urzua, 2006.
"The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior,"
Journal of Labor Economics,
University of Chicago Press, vol. 24(3), pages 411-482, July.
- James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," NBER Working Papers 12006, National Bureau of Economic Research, Inc.
- Cawley, John & Heckman, James & Vytlacil, Edward, 2001. "Three observations on wages and measured cognitive ability," Labour Economics, Elsevier, vol. 8(4), pages 419-442, September.
- Erik Lindqvist & Roine Vestman, 2011.
"The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment,"
American Economic Journal: Applied Economics,
American Economic Association, vol. 3(1), pages 101-28, January.
- Lindqvist, Erik & Westman, Roine, 2009. "The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment," Working Paper Series 794, Research Institute of Industrial Economics.
- 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 165-88, January.
- Eliason, Marcus & Storrie, Donald, 2009. "Job loss is bad for your health - Swedish evidence on cause-specific hospitalization following involuntary job loss," Social Science & Medicine, Elsevier, vol. 68(8), pages 1396-1406, April.
- Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March.
- Henry S. Farber, 2003. "Job Loss in the United States, 1981-2001," Working Papers 113, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Kenneth A. Couch & Dana W. Placzek, 2010. "Earnings Losses of Displaced Workers Revisited," American Economic Review, American Economic Association, vol. 100(1), pages 572-89, March.
- Derek Neal, 1998. "The Link between Ability and Specialization: An Explanation for Observed Correlations between Wages and Mobility Rates," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 173-200.
- Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 1265-1306, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peeter Luikmel).
If references are entirely missing, you can add them using this form.