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Who buffers income losses after job displacement? The role of alternative income sources, the family, and the state

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  • Hank, Eva
  • Fackler, Daniel

Abstract

Using the SOEP this paper analyses to what extent alternative income sources, reactions within the household context, and redistribution by the state attenuate earnings losses of displaced workers. Applying propensity score matching and FE estimations, we find that income from self-employment slightly reduces the earnings gap, severance payments buffer losses in the short run. At the household level, there is no added worker effect, but taxes and transfers mitigate income losses substantially.

Suggested Citation

  • Hank, Eva & Fackler, Daniel, 2017. "Who buffers income losses after job displacement? The role of alternative income sources, the family, and the state," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168098, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc17:168098
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    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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