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Two-Sided Learning, Labor Turnover and Worker Displacement

Author

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  • Pfann, Gerard A.

    (Maastricht University)

  • Hamermesh, Daniel S.

    (University of Texas at Austin)

Abstract

We construct a general dynamic structural model of two-sided learning between a firm and its workers. We estimate an empirical version of the model using personnel data from Fokker Aircraft that cover the path of layoffs and quits through its bankruptcy. We find that the firm learns about its workers’ loyalty (demonstrating the role of information in repeated cooperative principal-agent relationships). There is no evidence that workers 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 affected workers. It thus allows us to measure the increases in the firm’s value from learning about its workers’ behavior and to infer the extent of biases in estimated losses from displacement from samples restricted to displaced workers.

Suggested Citation

  • Pfann, Gerard A. & Hamermesh, Daniel S., 2001. "Two-Sided Learning, Labor Turnover and Worker Displacement," IZA Discussion Papers 308, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp308
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    References listed on IDEAS

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    Cited by:

    1. Huttunen, Kristiina & Moen, Jarle & Salvanes, Kjell G., 2006. "How Destructive Is Creative Destruction? The Costs of Worker Displacement," IZA Discussion Papers 2316, Institute of Labor Economics (IZA).
    2. Emilia Del Bono & Andrea Weber & Rudolf Winter-Ebmer, 2012. "Clash Of Career And Family: Fertility Decisions After Job Displacement," Journal of the European Economic Association, European Economic Association, vol. 10(4), pages 659-683, August.
    3. von Greiff, Jenny, 2009. "Displacement and self-employment entry," Labour Economics, Elsevier, vol. 16(5), pages 556-565, October.
    4. Seim, David, 2019. "On the incidence and effects of job displacement: Evidence from Sweden," Labour Economics, Elsevier, vol. 57(C), pages 131-145.
    5. repec:zbw:rwirep:0039 is not listed on IDEAS
    6. Kenneth A. Counch, 2003. "Job Matching and Wage Growth in the U.S. and Germany," Working papers 2003-10, University of Connecticut, Department of Economics.
    7. Tatsiramos, Konstantinos, 2010. "Job displacement and the transitions to re-employment and early retirement for non-employed older workers," European Economic Review, Elsevier, vol. 54(4), pages 517-535, May.
    8. Emilia Del Bono & Andrea Weber & Rudolf Winter-Ebmer, 2008. "Clash of Career and Family - Fertility Decisions after Job Displacement," Ruhr Economic Papers 0039, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    9. Arja Jolkkonen & Pertti Koistinen & Arja Kurvinen & Liudmila Lipiäinen & Tapio Nummi & Pekka Virtanen, 2018. "Labour Market Attachment Following Major Workforce Downsizings: A Comparison of Displaced and Retained Workers," Work, Employment & Society, British Sociological Association, vol. 32(6), pages 992-1010, December.

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    More about this item

    Keywords

    turnover; displacement; Learning;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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