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Reconsidering the cost of job loss: Evidence from redundancies and mass layoffs

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  • Cederlöf, Jonas

    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

Abstract

This paper studies the consequences of job loss. While previous literature has relied on mass layof fs and plant closures for identification, I exploit discontinuities in the likelihood of dis placement generated by a last-in-first-out rule used at layof fs in Sweden. Matching data on individual layof f notifications to administrative records, I find that permanent earnings losses are only found among workers losing their job in mass layof fs, whereas workers dis placed in smaller layof fs fully recover. Auxiliary analysis suggests that large layof fs increase exposure to non-employment, prolong unemployment and cause workers to leave the labor force, conceivably by affecting the local labor market

Suggested Citation

  • Cederlöf, Jonas, 2024. "Reconsidering the cost of job loss: Evidence from redundancies and mass layoffs," Working Paper Series 2024:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2024_002
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    More about this item

    Keywords

    last-in-first-out; job loss; displaced worker; mass layoff; earnings loss;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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