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

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Author Info

  • Anabela Carneiro

    ()
    (CETE, Faculdade de Economia, Universidade do Porto)

  • Pedro Portugal

    ()
    (Banco de Portugal and Universidade Nova de Lisboa)

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 Universidade do Porto, Faculdade de Economia do Porto in its series CEF.UP Working Papers with number 0607.

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Length: 31 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:por:cetedp:0607

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Related research

Keywords: Displacement; earnings losses determinants; firm characteristics;

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References

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  1. A. Lefranc, 2002. "Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United-States," THEMA Working Papers 2002-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
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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, 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 07-2, Federal Reserve Bank of Boston.
  3. Jukka Appelqvist, 2007. "Wage and Earnings Losses of Displaced Workers in Finland," Discussion Papers 422, Government Institute for Economic Research Finland (VATT).
  4. Black, Sandra & Devereux, Paul J. & Salvanes, Kjell G, 2013. "Losing Heart? The Effect of Job Displacement on Health," CEPR Discussion Papers 9276, C.E.P.R. Discussion Papers.
  5. 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.
  6. 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.
  7. Thomas Zwick, 2012. "Earnings Losses after Non-Employment Increase with Age," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 64(1), pages 2-19, January.
  8. Giordano Mion & Luca David Opromolla, 2011. "Managers' Mobility, Trade Status and Wages," CEP Discussion Papers dp1044, Centre for Economic Performance, LSE.
  9. Bruce Fallick & John Haltiwanger & Erika McEntarfer, 2012. "Job-to-job flows and the consequences of job separations," Finance and Economics Discussion Series 2012-73, Board of Governors of the Federal Reserve System (U.S.).
  10. Ossi Korkeamäki & Tomi Kyyrä, 2008. "A Distributional Analysis of Displacement Costs in an Economic Depression and Recovery," Discussion Papers 465, Government Institute for Economic Research Finland (VATT).

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