The effects of being out of the labor market on subsequent wages: evidence for Uruguay
Based on administrative data combining workers’ earnings histories and unemployment insurance benefits, we document short and long term wage losses for a large sample of Uruguayan formal workers with high tenure. We are able to study how wage losses vary across age groups, gender, industry and size of the firm. We also assess differences between switchers and non switchers, and consider the effect of the economic cycle. Our data allows providing original evidence about the smoothing role of the unemployment insurance program, even in a developing country. Our main findings indicate that workers loose around 48% of their pre-displacement wages in the first quarter after displacement, and after five years, losses are still 3%.
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| Length: | 22 pages |
| Date of creation: | Sep 2012 |
| Handle: | RePEc:ulr:wpaper:dt-10-12 |
| Contact details of provider: | Postal: Joaquín Requena 1375, CP 11200, Montevideo Phone: (598) 2400-0406 Fax: (598) 2419-8727 Web page: http://www.iecon.ccee.edu.uy/ More information through EDIRC
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- Ben Lockwood, 1991. "Information Externalities in the Labour Market and the Duration of Unemployment," Review of Economic Studies, Oxford University Press, vol. 58(4), pages 733-753. Full references (including those not matched with items on IDEAS)
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