"Earnings Losses of Displaced Workers"
We exploit administrative data combining workers' earnings histories with information about their firms to estimate the magnitude and temporal pattern of displaced workers' earnings losses. We find that high-tenure workers separating from distressed firms suffer long-term losses averaging 25 percent per year. In addition, we find that displaced workers' losses: (i) begin mounting before their separations, (ii) depend only slightly on their age and sex, (iii) depend more on local labor-market conditions and their former industries, (iv) are not, however, limited to those in a few sectors, and (v) are large even for those who find new jobs in similar firms.
KeywordsOccupational Displacement, Skills Migration, Unemployment, Specialisation, Firms, Severance Pay, Earnings Losses, Empirical Study
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