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Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set

  • Carneiro, Anabela


    (University of Porto)

  • Portugal, Pedro


    (Banco de Portugal)

This paper examines the long-term earnings losses of displaced workers in Portugal, using a nationally representative longitudinal linked employer-employee data set. The results show that four years after displacement the earnings of displaced workers remain around 9% (women) to 12% (men) below their counterfactual expected levels. The post-displacement earnings losses are mainly associated with the loss of tenure within the firm and, to a lesser extent, to the loss of sector-specific features. Furthermore, workers who experienced a spell of nonemployment are the most affected by job displacement. Finally, this study points to the importance of controlling for employers' characteristics in this type of wages-dynamic analysis, since there are systematic differences in earnings between displaced and non-displaced workers that stem from differences in firm characteristics. Ignoring them may confound the evaluation of the earnings losses.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2289.

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Length: 29 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2289
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  14. repec:oup:qjecon:v:107:y:1992:i:4:p:1371-91 is not listed on IDEAS
  15. Arnaud Lefranc, 2002. "Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United-States," THEMA Working Papers 2002-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
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  19. Bruce C. Fallick, 1996. "A review of the recent empirical literature on displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
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  21. William J. Carrington, 1993. "Wage Losses for Displaced Workers: Is It Really the Firm That Matters?," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 435-462.
  22. Douglas L. Kruse, 1988. "International trade and the labor market experience of displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 41(3), pages 402-417, April.
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  27. repec:oup:restud:v:54:y:1987:i:3:p:437-59 is not listed on IDEAS
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