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

  • Anabela Carneiro

    ()

    (CETE, Faculdade de Economia, Universidade do Porto)

  • Pedro Portugal

    ()

    (Banco de Portugal and Universidade Nova de Lisboa)

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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File URL: http://www.fep.up.pt/investigacao/cete/papers/dp0607.pdf
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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series CEF.UP Working Papers with number 0607.

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Length: 31 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:por:cetedp:0607
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  1. John T. Addison & Pedro Portugal, 2000. "Unemployment Duration: Competing and Defective Risks," Working Papers w200001, Banco de Portugal, Economics and Research Department.
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  19. Robert H. Topel, 1990. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," NBER Working Papers 3294, National Bureau of Economic Research, Inc.
  20. Stefan Bender & Christian Dustmann & David Margolis & Costas Meghir, 1999. "Worker displacement in France and Germany," IFS Working Papers W99/14, Institute for Fiscal Studies.
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  25. Stevens, Ann Huff, 1997. "Persistent Effects of Job Displacement: The Importance of Multiple Job Losses," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 165-88, January.
  26. Arnaud Lefranc, 2003. "Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United States," William Davidson Institute Working Papers Series 2003-614, William Davidson Institute at the University of Michigan.
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