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What Happens to Wages After Displacement?

Author

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  • Kaplan, David
  • Martinez, Gabriel
  • Robertson, Raymond

Abstract

Faced with limited resources, policymakers need to know when and where to target support for displaced workers. The academic literature offers little support, presenting wide-ranging results with no consistent explanation for the observed differences in wages after workers are displaced. In this paper, we demonstrate that the heterogeneity found in the literature is consistent with varying market conditions. The results suggest that support for displaced workers can be more efficiently allocated by considering the timing and location of displacement.

Suggested Citation

  • Kaplan, David & Martinez, Gabriel & Robertson, Raymond, 2005. "What Happens to Wages After Displacement?," MPRA Paper 3079, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:3079
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    References listed on IDEAS

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    Cited by:

    1. Antonio Martins-Neto & Xavier Cirera & Alex Coad, 2024. "Routine-biased technological change and employee outcomes after mass layoffs: evidence from Brazil," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 33(3), pages 555-583.
    2. Naércio Aquino Menezes-Filho & Marc-Andreas Muendler & Garey Ramey, 2008. "The Structure of Worker Compensation in Brazil, with a Comparison to France and the United States," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 324-346, May.
    3. repec:idb:brikps:7203 is not listed on IDEAS
    4. Kaplan, David S. & Piedra, Eduardo & Seira, Enrique, 2011. "Entry regulation and business start-ups: Evidence from Mexico," Journal of Public Economics, Elsevier, vol. 95(11), pages 1501-1515.
    5. Naércio Aquino Menezes-Filho & Marc-Andreas Muendler & Garey Ramey, 2008. "The Structure of Worker Compensation in Brazil, with a Comparison to France and the United States," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 324-346, May.
    6. Pankaj C. Patel, 2024. "Out of the frying pan into the fire: displaced workers’ vocational skill specificity, self-employment, and income," Small Business Economics, Springer, vol. 63(3), pages 1197-1223, October.
    7. Bendewald, Ellen & Maryns, Nicholas & Robertson, Raymond, 2016. "An Evaluation of the Workforce Investment Act Adult Program in Minnesota: Lessons from the Financial Crisis," IZA Discussion Papers 10107, Institute of Labor Economics (IZA).
    8. Verónica Amarante & Rodrigo Arim & Andrés Dean, 2014. "The Effects of Being Out of the Labor Market on Subsequent Wages: Evidence for Uruguay," Journal of Labor Research, Springer, vol. 35(1), pages 39-62, March.
    9. Carranza, Rafael & Prieto, Joaquín & Sehnbruch, Kirsten, 2025. "Job loss and earnings inequality: distributional effects of formal re-employment in Chile," LSE Research Online Documents on Economics 127462, London School of Economics and Political Science, LSE Library.
    10. Nicolas Melissas, 2007. "The Trader, the Market Maker, his Guru and her Information," Working Papers 0702, Centro de Investigacion Economica, ITAM.
    11. Kaplan, David S. & Gonzalez, Gabriel Martinez & Robertson, Raymond, 2007. "Mexican employment dynamics : evidence from matched firm-worker data," Policy Research Working Paper Series 4433, The World Bank.
    12. Rosario Aldunate & Gabriela Contreras & Matías Tapia, 2019. "Sectoral Transitions Between Formal Wage Jobs in Chile," Working Papers Central Bank of Chile 836, Central Bank of Chile.
    13. Verónica Alaimo & Mariano Bosch & David S. Kaplan & Carmen Pagés & Laura Ripani, 2015. "Jobs for Growth," IDB Publications (Books), Inter-American Development Bank, number 90977, February.
    14. Couch, Kenneth A. & Jolly, Nicholas A. & Placzek, Dana W., 2011. "Earnings losses of displaced workers and the business cycle: An analysis with administrative data," Economics Letters, Elsevier, vol. 111(1), pages 16-19, April.
    15. Appelqvist, Jukka, 2007. "Wage and Earnings Losses of Displaced Workers in Finland," Discussion Papers 422, VATT Institute for Economic Research.
    16. David Kaplan & Eduardo Piedra & Enrique Seira, 2006. "Are Burdensome Registration Procedures an Important Barrier on Firm Creation? Evidence from Mexico," Discussion Papers 06-013, Stanford Institute for Economic Policy Research.

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    More about this item

    Keywords

    Displaced Workers; Mexico;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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