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Understanding the Reallocation of Displaced Workers to Firms

Author

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  • Paul, Brandily
  • Hémet, Camille
  • Malgouyres, Clément

Abstract

We study job displacement in France. In the medium run, losses in firmspecific wage premium account for a substantial share of the overall cost of displacement. However, and despite the positive correlation between premium and productivity in the cross-section of firms, we find that workers are reemployed by high productivity, low labor share firms. The observed reallocation is therefore productivity-enhancing, yet costly for workers. We show that destination firms are less likely to conclude collective wage agreements and have lower participation rates at professional elections. Overall, our results point to a loss in bargaining power.

Suggested Citation

  • Paul, Brandily & Hémet, Camille & Malgouyres, Clément, 2022. "Understanding the Reallocation of Displaced Workers to Firms," CEPR Discussion Papers 17071, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17071
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    2. Bertheau, Antoine & Acabbi, Edoardo & Barcelo, Cristina & Gulyas, Andreas & Lombardi, Stefano & Saggio, Raffaele, 2022. "The Unequal Cost of Job Loss across Countries," IZA Discussion Papers 15033, Institute of Labor Economics (IZA).
    3. Garita, Jonathan & Pastrana, Guillermo & Slon, Pablo, 2024. "Job displacement effects and labor market sorting during COVID-19," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 5(2).
    4. Axelle Arquié & Thomas Grjebine, 2024. "Are Mass Layoffs Individually Costly But Socially Beneficial?," Working Papers 2024-03, CEPII research center.

    More about this item

    Keywords

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    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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