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Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set

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  • Carneiro, Anabela

    ()
    (University of Porto)

  • Portugal, Pedro

    ()
    (Banco de Portugal)

Abstract

This paper examines the long-term earnings losses of displaced workers in Portugal, using a nationally representative longitudinal linked employer-employee data set. The results show that four years after displacement the earnings of displaced workers remain around 9% (women) to 12% (men) below their counterfactual expected levels. The post-displacement earnings losses are mainly associated with the loss of tenure within the firm and, to a lesser extent, to the loss of sector-specific features. Furthermore, workers who experienced a spell of nonemployment are the most affected by job displacement. Finally, this study points to the importance of controlling for employers' characteristics in this type of wages-dynamic analysis, since there are systematic differences in earnings between displaced and non-displaced workers that stem from differences in firm characteristics. Ignoring them may confound the evaluation of the earnings losses.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2289.

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Length: 29 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2289

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Keywords: displacement; earnings losses; firm-specific human capital;

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References

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Citations

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Cited by:
  1. Verónica Amarante & Rodrigo Arim & Andrés Dean, 2014. "The Effects of Being Out of the Labor Market on Subsequent Wages: Evidence for Uruguay," Journal of Labor Research, Springer, Springer, vol. 35(1), pages 39-62, March.
  2. Yolanda K. Kodrzycki, 2007. "Using unexpected recalls to examine the long-term earnings effects of job displacement," Working Papers, Federal Reserve Bank of Boston 07-2, Federal Reserve Bank of Boston.
  3. Pedro Portugal, 2006. "Wage Setting in the Portuguese Labor Market: A Microeconomic Approach," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department, Banco de Portugal, Economics and Research Department.
  4. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2012. "Losing Heart? The Effect of Job Displacement on Health," NBER Working Papers 18660, National Bureau of Economic Research, Inc.
  5. Mion, Giordano & Opromolla, Luca David, 2011. "Managers' Mobility, Trade Status, and Wages," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8230, C.E.P.R. Discussion Papers.
  6. Bruce Fallick & John Haltiwanger & Erika McEntarfer, 2012. "Job-to-job flows and the consequences of job separations," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2012-73, Board of Governors of the Federal Reserve System (U.S.).
  7. Zwick, Thomas, 2008. "Earnings Losses After Non-employment Increase With Age," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 08-041, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. José Ignacio García Pérez & Yolanda Rebollo Sanz, 2004. "Wage changes through job mobility in Europe: A multinomial endogenous switching approach," Economic Working Papers at Centro de Estudios Andaluces E2004/70, Centro de Estudios Andaluces.
  9. Jukka Appelqvist, 2007. "Wage and Earnings Losses of Displaced Workers in Finland," Discussion Papers, Government Institute for Economic Research Finland (VATT) 422, Government Institute for Economic Research Finland (VATT).
  10. Ossi Korkeamäki & Tomi Kyyrä, 2008. "A Distributional Analysis of Displacement Costs in an Economic Depression and Recovery," Discussion Papers, Government Institute for Economic Research Finland (VATT) 465, Government Institute for Economic Research Finland (VATT).

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