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Workforce Reorganization and the Worker

  • Kriechel, Ben

    ()

    (Economix Research & Consulting)

  • Pfann, Gerard A.

    ()

    (Maastricht University)

In this paper we study the joint decision process of changing the structure of jobs and laying off individual workers in a firm that downsizes its workforce. A hierarchical decision model is proposed and estimated using personnel data from a firm in demise comparing the characteristics of the individual workers and the structure of the firm's labour force before and after its reorganization. Our results show that workers in jobs in the top levels of each skill group's hierarchy are better protected against downsizing due to larger productivity shocks and larger firing costs.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5794.

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Length: 32 pages
Date of creation: Jun 2011
Date of revision:
Publication status: published in: Applied Economics, 2013, 45 (13), 1719-1729
Handle: RePEc:iza:izadps:dp5794
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