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The Unequal Cost of Job Loss across Countries

Author

Listed:
  • Bertheau, Antoine

    (NHH Bergen,Norway)

  • Acabbi, Edoardo

    (Universidad Carlos III de Madrid)

  • Barcelo, Cristina

    (Bank of Spain)

  • Gulyas, Andreas

    (University of Mannheim)

  • Lombardi, Stefano

    (VATT, Helsinki)

  • Saggio, Raffaele

    (University of British Columbia)

Abstract

We document the consequences of losing a job across countries using a harmonized research design. Workers in Denmark and Sweden experience the lowest earnings declines following job displacement, while workers in Italy, Spain, and Portugal experience losses three times as high. French and Austrian workers face earnings losses somewhere in-between. Key to these differences is that Southern European workers are less likely to find employment following displacement. Loss of employer-specific wage premiums accounts for 40% to 95% of within-country wage declines. The use of active labor market policies predicts a significant portion of the cross-country heterogeneity in earnings losses.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp15033
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    References listed on IDEAS

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    Cited by:

    1. Di Addario, Sabrina & Kline, Patrick & Saggio, Raffaele & Sølvsten, Mikkel, 2023. "It ain’t where you’re from, it’s where you’re at: Hiring origins, firm heterogeneity, and wages," Journal of Econometrics, Elsevier, vol. 233(2), pages 340-374.
    2. Britto, Diogo & Melo, Caíque & Sampaio, Breno, 2022. "The Kids Aren't Alright: Parental Job Loss and Children's Outcomes within and beyond Schools," IZA Discussion Papers 15591, Institute of Labor Economics (IZA).
    3. Mária Balgová & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," CRC TR 224 Discussion Paper Series crctr224_2023_457, University of Bonn and University of Mannheim, Germany.
    4. Paul Brandily & Camille Hémet & Clément Malgouyres, 2022. "Understanding the Reallocation of Displaced Workers to Firms," Working Papers halshs-03082302, HAL.
    5. Weber, Andrea & Bardits, Anna & Adamecz, Anna & Bisztray, Márta & Szabo-Morvai, Agnes, 2023. "Precautionary Fertility: Conceptions, Births, and Abortions around Employment Shocks," CEPR Discussion Papers 17988, C.E.P.R. Discussion Papers.
    6. Tito Boeri & Pierre Cahuc, 2022. "Labor Market Insurance Policies in the XXI Century," SciencePo Working papers Main hal-03878719, HAL.
    7. Arntz, Melanie & Ivanov, Boris & Pohlan, Laura, 2022. "Regional Structural Change and the Effects of Job Loss," IZA Discussion Papers 15313, Institute of Labor Economics (IZA).
    8. Matías Ciaschi, 2020. "Job loss and household labor supply adjustments in developing countries: Evidence from Argentina," CEDLAS, Working Papers 0271, CEDLAS, Universidad Nacional de La Plata.
    9. Ana Margarida Fernandes & Joana Silva, 2023. "Adjusting to Transitory Shocks: Worker Impact, Firm Channels, and (Lack of) Income Support," CESifo Working Paper Series 10479, CESifo.
    10. Balgova, Maria & Illing, Hannah, 2023. "Job Displacement and Migrant Labor Market Assimilation," IZA Discussion Papers 16349, Institute of Labor Economics (IZA).
    11. Arellano-Bover, Jaime & Saltiel, Fernando, 2021. "Differences in On-the-Job Learning across Firms," IZA Discussion Papers 14473, Institute of Labor Economics (IZA).
    12. Ivan Lagrosa, 2022. "Income dynamics in dual labor markets," Working Papers wp2022_2209, CEMFI.
    13. Maria Balgova & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," ECONtribute Discussion Papers Series 246, University of Bonn and University of Cologne, Germany.
    14. Victor Hernandez Martinez & Kaixin Liu, 2022. "The Value of Unemployment Insurance: Liquidity vs. Insurance Value," Working Papers 22-16, Federal Reserve Bank of Cleveland.
    15. Sabrina Di Addario & Patrick Kline & Raffaele Saggio & Mikkel Soelvsten, 2022. "It ain't where you're from it's where you're at: firm effects, state dependence, and the gender wage gap," Temi di discussione (Economic working papers) 1374, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    labor market institutions; layoffs; labor turnover; wage dynamics; job loss costs; cross-country matched employer–employee dataset;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • 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

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