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What Happens to Wages after Displacement?

  • David S. Kaplan

    ()

  • Raymond Robertson

    ()

  • Gabriel Martínez González

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://www.brookings.edu/press/Journals/2005/economiaspring2005.aspx
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Article provided by LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION in its journal JOURNAL OF LACEA ECONOMIA.

Volume (Year): (2005)
Issue (Month): ()
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Handle: RePEc:col:000425:008661
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  1. Gustavo Gonzaga, 2003. "Labor Turnover and Labor Legislation in Brazil," Textos para discussão 475, Department of Economics PUC-Rio (Brazil).
  2. Daniel S. Hamermesh, 1988. "Labor Demand and the Structure of Adjustment Costs," NBER Working Papers 2572, National Bureau of Economic Research, Inc.
  3. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
  4. Naercio Menezes-Filho, 2004. "The Costs of Displacement in Brazil," Econometric Society 2004 Latin American Meetings 200, Econometric Society.
  5. 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.
  6. 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.
  7. 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.
  8. Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues 91-5, Federal Reserve Bank of Chicago.
  9. 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.
  10. 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.
  11. 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.
  12. Pfann, Gerard A & Ben Kriechel, 2003. "Heterogeneity among Displaced Workers," Royal Economic Society Annual Conference 2003 164, Royal Economic Society.
  13. 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.
  14. 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.
  15. Bruce C. Fallick, 1996. "A review of the recent empirical literature on displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
  16. 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.
  17. 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.
  18. Gordon H. Hanson, 1998. "North American Economic Integration and Industry Location," NBER Working Papers 6587, National Bureau of Economic Research, Inc.
  19. Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, vol. 90(4), pages 742-764, September.
  20. 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.
  21. 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.
  22. James J. Heckman & Carmen Pages, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," NBER Working Papers 7773, National Bureau of Economic Research, Inc.
  23. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March.
  24. 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.
  25. 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.
  26. 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.
  27. 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.
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