Two-Sided Learning, Labor Turnover, and Worker Displacement
We remedy several deficiencies in the recent literature on job loss while modernizing the very early job-displacement literature. After constructing a structural model of two-sided learning between a firm and its workers, we estimate it using personnel data from Fokker Aircraft in the Netherlands that cover the path of layoffs and quits up to and including its bankruptcy in March 1996. We find that the firm learns about the workers’ loyalty (demonstrating the role of information in repeated principal-agent relationships), while workers do not learn (consistent with earlier empirical results on American workers). The type of data that we use also generates information on the value of learning and on whether and how the characteristics of workers who remain until the firm’s death differ from those of all of its affected workers. It thus allows us to infer the extent of biases in measuring the losses arising from displacement if the sample is restricted to displaced workers.
|Date of creation:||Oct 2000|
|Contact details of provider:|| Postal: 1155 East 60th Street, Chicago, IL 60637|
Web page: http://harrisschool.uchicago.edu/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pfann, Gerard Antonie, 2000.
"Options to Quit,"
CEPR Discussion Papers
2563, C.E.P.R. Discussion Papers.
- Felli, Leonardo & Harris, Christopher, 1996. "Learning, Wage Dynamics, and Firm-Specific Human Capital," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 838-868, August.
- 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.
- James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998.
"Characterizing Selection Bias Using Experimental Data,"
NBER Working Papers
6699, National Bureau of Economic Research, Inc.
- James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
- Francine D. Blau & Lawrence M. Kahn, 1981. "Race and Sex Differences in Quits by Young Workers," ILR Review, Cornell University, ILR School, vol. 34(4), pages 563-577, July.
- Kiefer, Nicholas M & Neumann, George R, 1979.
"An Empirical Job-Search Model, with a Test of the Constant Reservation-Wage Hypothesis,"
Journal of Political Economy,
University of Chicago Press, vol. 87(1), pages 89-107, February.
- KIEFER, Nicholas M. & NEUMANN, George R., "undated". "An empirical job-search model, with a test of the constant reservation-wage hypothesis," CORE Discussion Papers RP 358, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Daniel S. Hamermesh, 1987. "The Costs of Worker Displacement," The Quarterly Journal of Economics, Oxford University Press, vol. 102(1), pages 51-75.
- 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.
- Daniel S. Hamermesh, 1984. "The Costs of Worker Displacement," NBER Working Papers 1495, National Bureau of Economic Research, Inc.
- 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.).
- Bruce C. Fallick, 1996. "A Review of the Recent Empirical Literature on Displaced Workers," ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
- Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 439-479.
- Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 313-350.
- Radner, Roy, 1981. "Monitoring Cooperative Agreements in a Repeated Principal-Agent Relationship," Econometrica, Econometric Society, vol. 49(5), pages 1127-1148, September.
- Stiglitz, Joseph E & Weiss, Andrew, 1983. "Incentive Effects of Terminations: Applications to the Credit and Labor Markets," American Economic Review, American Economic Association, vol. 73(5), pages 912-927, December.
When requesting a correction, please mention this item's handle: RePEc:har:wpaper:0021. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eleanor Cartelli)
If references are entirely missing, you can add them using this form.