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Long-term effects of public policy for displaced workers in Sweden

  • Henry Ohlsson

Purpose - The purpose of this paper is to study the long-term effects of policy measures for displaced workers. The focus is on the individuals affected by the closure of the Uddevalla Shipyard in western Sweden in 1985 and the cutbacks at the LKAB mines in northern Sweden in 1983. Design/methodology/approach - These workers not only experienced job loss, but were also target groups for extraordinary labour market policies. Using register data from Statistics Sweden (labour market status, earnings, education etc.), the authors follow those affected until 1999, comparing their experiences with the development of a large sample of other workers who lost their jobs because of plant closures in 1987-1988 but who did not receive extraordinary measures. Findings - Estimations of the net effect of the extraordinary measures find that they did have positive long-term effects for the displaced shipyard workers and miners. They have higher employment, not higher unemployment, and higher earnings than the comparison group. Originality/value - The authors are not aware of any previous research on the effects of labour market policy addressing displacement in the long term.

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Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 33 (2012)
Issue (Month): 5 (October)
Pages: 514-538

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Handle: RePEc:eme:ijmpps:v:33:y:2012:i:5:p:514-538
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  1. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
  2. Daniel S. Hamermesh, 1984. "The Costs of Worker Displacement," NBER Working Papers 1495, National Bureau of Economic Research, Inc.
  3. 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.
  4. Stefan Hochguertal & Henry Ohlsson, 2000. "Inter Vivos Gifts: Compensatory or Equal Sharing?," Econometric Society World Congress 2000 Contributed Papers 0699, Econometric Society.
  5. Pfann Gerard A. & Hamermesh Daniel S., 2008. "Two-Sided Learning with Applications to Labor Turnover and Worker Displacement," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(5-6), pages 423-445, October.
  6. Stenberg, Anders & Westerlund, Olle, 2004. "Does Comprehensive Education Work for the Long-term Unemployed?," Umeå Economic Studies 641, Umeå University, Department of Economics.
  7. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March.
  8. Ana Lamo & Julian Messina & Etienne Wasmer, 2007. "Are Specific Skills an Obstacle to Labor Market Adjustment? Theory and an Application to the EU Enlargement," CSEF Working Papers 172, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  9. Louis S. Jacobson & Robert J. LaLonde & Daniel Sullivan, 1992. "Earnings Losses of Displaced Workers," Upjohn Working Papers and Journal Articles 92-11, W.E. Upjohn Institute for Employment Research.
  10. Gregory, Mary & Jukes, Robert, 2001. "Unemployment and Subsequent Earnings: Estimating Scarring among British Men 1984-94," Economic Journal, Royal Economic Society, vol. 111(475), pages F607-25, November.
  11. Stefan Hochguertel & Henry Ohlsson, 2007. "Compensatory Inter Vivos Gifts," Tinbergen Institute Discussion Papers 07-074/3, Tinbergen Institute.
  12. Christian Dustmann & Costas Meghir, 2001. "Wages, experience and seniority," IFS Working Papers W01/01, Institute for Fiscal Studies.
  13. Kristiina Huttunen & Jarle Møen & Kjell G. Salvanes, 2011. "How Destructive Is Creative Destruction? Effects Of Job Loss On Job Mobility, Withdrawal And Income," Journal of the European Economic Association, European Economic Association, vol. 9(5), pages 840-870, October.
  14. Daniel S. Hamermesh, 1987. "The Costs of Worker Displacement," The Quarterly Journal of Economics, Oxford University Press, vol. 102(1), pages 51-75.
  15. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
  16. Stenberg, Anders, 2011. "Using longitudinal data to evaluate publicly provided formal education for low skilled," Economics of Education Review, Elsevier, vol. 30(6), pages 1262-1280.
  17. Eliason, Marcus & Storrie, Donald, 2004. "Does job loss shorten life?," Working Papers in Economics 153, University of Gothenburg, Department of Economics, revised 17 Sep 2007.
  18. Martin Browning & Thomas F. Crossley, 2009. "Shocks, Stocks, and Socks: Smoothing Consumption Over a Temporary Income Loss," Journal of the European Economic Association, MIT Press, vol. 7(6), pages 1169-1192, December.
  19. Marcus Eliason & Donald Storrie, 2006. "Lasting or Latent Scars? Swedish Evidence on the Long-Term Effects of Job Displacement," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 831-856, October.
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