For Work / Against Work
Debates on the centrality of work

"Earnings Losses of Displaced Workers"

by Jacobson, Louis S; LaLonde, Robert J; Sullivan, Daniel G (1993)


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.


Occupational Displacement, Skills Migration, Unemployment, Specialisation, Firms, Severance Pay, Earnings Losses, Empirical Study


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