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What Happens to Wages After Displacement?

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Author Info

  • Kaplan, David
  • Martinez, Gabriel
  • Robertson, Raymond

Abstract

Faced with limited resources, policymakers need to know when and where to target support for displaced workers. The academic literature offers little support, presenting wide-ranging results with no consistent explanation for the observed differences in wages after workers are displaced. In this paper, we demonstrate that the heterogeneity found in the literature is consistent with varying market conditions. The results suggest that support for displaced workers can be more efficiently allocated by considering the timing and location of displacement.

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File URL: http://mpra.ub.uni-muenchen.de/3079/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 3079.

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Date of creation: 2005
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Publication status: Published in Journal of the Latin American and Caribbean Economic Association 2.5(2005): pp. 197-234
Handle: RePEc:pra:mprapa:3079

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Keywords: Displaced Workers; Mexico;

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References

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  1. Naercio Menezes-Filho, 2004. "The Costs of Displacement in Brazil," Econometric Society 2004 Latin American Meetings 200, Econometric Society.
  2. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March.
  3. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  4. Gustavo Gonzaga, 2003. "Labor Turnover and Labor Legislation in Brazil," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  5. Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, vol. 90(4), pages 742-764, September.
  6. Carmen Pagés-Serra & James J. Heckman, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," IDB Publications 4119, Inter-American Development Bank.
  7. 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.
  8. Steve J. Davis & John Haltiwanger, 1991. "Gross Job Creation, Gross Job Destruction and Employment Reallocation," NBER Working Papers 3728, National Bureau of Economic Research, Inc.
  9. Abbring, J.H. & Berg, G. van den & Gautier, P.A. & Lomwel, A.G.C. van & Ours, J.C. van & Ruhm, C.J., 1998. "Displaced Workers in The United States and The Netherlands," Discussion Paper 1998-96, Tilburg University, Center for Economic Research.
  10. Ann Huff Stevens, 1995. "Long-Term Effects of Job Displacement: Evidence from the Panel Study of Income Dynamics," NBER Working Papers 5343, National Bureau of Economic Research, Inc.
  11. Kenneth A. Couch, 2001. "Earnings losses and unemployment of displaced workers in Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(3), pages 559-572, April.
  12. Hanson, Gordon H, 1998. "North American Economic Integration and Industry Location," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 30-44, Summer.
  13. Burda, Michael C. & Mertens, Antje, 1999. "Estimating wage losses of displaced workers in Germany," SFB 373 Discussion Papers 1999,35, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  14. McLaughlin, Kenneth J, 1991. "A Theory of Quits and Layoffs with Efficient Turnover," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 1-29, February.
  15. Bruce C. Fallick, 1995. "A review of the recent empirical literature on displaced workers," Finance and Economics Discussion Series 95-14, Board of Governors of the Federal Reserve System (U.S.).
  16. Daniel S. Hamermesh, 1988. "Labor Demand and the Structure of Adjustment Costs," NBER Working Papers 2572, National Bureau of Economic Research, Inc.
  17. Pfann, Gerard A & Ben Kriechel, 2003. "Heterogeneity among Displaced Workers," Royal Economic Society Annual Conference 2003 164, Royal Economic Society.
  18. Robertson, Raymond & Dutkowsky, Donald H., 2002. "Labor adjustment costs in a destination country: the case of Mexico," Journal of Development Economics, Elsevier, vol. 67(1), pages 29-54, February.
  19. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
  20. Hashimoto, Masanori, 1979. "Bonus Payments, on-the-Job Training, and Lifetime Employment in Japan," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1086-1104, October.
  21. Revenga, Ana & Riboud, Michelle & Tan, Hong, 1994. "The Impact of Mexico's Retraining Program on Employment and Wages," World Bank Economic Review, World Bank Group, vol. 8(2), pages 247-77, May.
  22. Panagides, Alexis & Patrinos, Harry Anthony & DEC, 1994. "Union - nonunion wage differentials in the developing world : a case study of Mexico," Policy Research Working Paper Series 1269, The World Bank.
  23. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
  24. 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.
  25. LE Marcal, 2001. "Does Trade Adjustment Assistance Help Trade-Displaced Workers?," Contemporary Economic Policy, Western Economic Association International, vol. 19(1), pages 59-72, 01.
  26. Sara de la Rica, 1995. "Evidence of Preseparation Earnings Losses in the Displaced Worker Survey," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 610-621.
  27. Carmen Pagés-Serra, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  28. Marie Howland & George E. Peterson, 1988. "Labor market conditions and the reemployment of displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 42(1), pages 109-122, October.
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Citations

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Cited by:
  1. Kaplan, David S. & Gonzalez, Gabriel Martinez & Robertson, Raymond, 2007. "Mexican employment dynamics : evidence from matched firm-worker data," Policy Research Working Paper Series 4433, The World Bank.
  2. Naércio Aquino Menezes-Filho & Marc-Andreas Muendler & Garey Ramey, 2008. "The Structure of Worker Compensation in Brazil, with a Comparison to France and the United States," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 324-346, May.
  3. Verónica Amarante & Rodrigo Arim & Andrés Dean, 2012. "The effects of being out of the labor market on subsequent wages: evidence for Uruguay," Documentos de Trabajo basados en Monografías (students working papers) 12-10, Instituto de Economía - IECON.
  4. Filhoz, Naercio Aquino Menezes & Muendler, Marc-Andreas & Ramey, Garey, 2005. "The Structure of Worker Compensation in Brazil, With a Comparison to France and the United States¤," University of California at San Diego, Economics Working Paper Series qt55q3h7nj, Department of Economics, UC San Diego.
  5. Jukka Appelqvist, 2007. "Wage and Earnings Losses of Displaced Workers in Finland," Discussion Papers 422, Government Institute for Economic Research Finland (VATT).
  6. Couch, Kenneth A. & Jolly, Nicholas A. & Placzek, Dana W., 2011. "Earnings losses of displaced workers and the business cycle: An analysis with administrative data," Economics Letters, Elsevier, vol. 111(1), pages 16-19, April.
  7. David Kaplan & Eduardo Piedra & Enrique Seira, 2007. "Are Burdensome Registration Procedures an Important Barrier on Firm Creation? Evidence from Mexico," Working Papers 0701, Centro de Investigacion Economica, ITAM.
  8. Nicolas Melissas, 2007. "The Trader, the Market Maker, his Guru and her Information," Working Papers 0702, Centro de Investigacion Economica, ITAM.

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