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Book part
Publication date: 14 July 2004

Henry S. Farber

I examine changes in the incidence and consequences of job loss between 1981 and 2001 using data from the Displaced Workers Surveys (DWS) from 1984 to 2002. The overall…

Abstract

I examine changes in the incidence and consequences of job loss between 1981 and 2001 using data from the Displaced Workers Surveys (DWS) from 1984 to 2002. The overall rate of job loss has a strong counter-cyclical component, but the job-loss rate was higher than might have been expected during the mid-1990’s given the strong labor market during that period. While the job-loss rate of more-educated workers increased, less-educated workers continue to have the highest rates of job loss overall. Displaced workers have a substantially reduced probability of employment and an increased probability of part-time employment subsequent to job loss. The more educated have higher post-displacement employment rates and are more likely to be employed full-time. The probabilities of employment and full-time employment among those reemployed subsequent to job loss increased substantially in the late 1990s, suggesting that the strong labor market eased the transition of displaced workers. Reemployment rates dropped sharply in the recession of 2001. Those re-employed, even full-time and regardless of education level, suffer significant earnings declines relative to what they earned before they were displaced. Additionally, foregone earnings growth (the growth in earnings that would have occurred had the workers not been displaced), is an important part of the cost of job loss for re-employed full-time job losers. There is no evidence of a decline during the tight labor market of the 1990s in the earnings loss of displaced workers who were reemployed full-time. In fact, earnings losses of displaced workers have been increasing since the mid 1990s.

Details

Accounting for Worker Well-Being
Type: Book
ISBN: 978-1-84950-273-3

Book part
Publication date: 11 August 2014

Núria Rodríguez-Planas

This paper is the first to present empirical evidence consistent with models of signaling through unemployment and to uncover a new stylized fact using the 1988–2006…

Abstract

This paper is the first to present empirical evidence consistent with models of signaling through unemployment and to uncover a new stylized fact using the 1988–2006 Displaced Worker Supplement (DWS) of the Current Population Survey (CPS), namely that, among white-collar workers, post-displacement earnings fall less rapidly with unemployment spells for layoffs than for plant closings. Because high-productivity workers are more likely to be recalled than low-productivity ones, they may choose to signal their productivity though unemployment, in which case the duration of unemployment may be positively related to post-displacement wages. Identification is done using workers whose plant closed as they cannot be recalled, and no incentives to signal arise.

Details

New Analyses of Worker Well-Being
Type: Book
ISBN: 978-1-78350-056-7

Keywords

Book part
Publication date: 11 July 2019

Annette Bergemann, Erik Grönqvist and Soffia Guðbjörnsdóttir

We investigate how career disruptions in terms of job loss may impact morbidity for individuals diagnosed with type 2 diabetes (T2D). Combining unique, high-quality…

Abstract

We investigate how career disruptions in terms of job loss may impact morbidity for individuals diagnosed with type 2 diabetes (T2D). Combining unique, high-quality longitudinal data from the Swedish National Diabetes Register (NDR) with matched employer–employee data, we focus on individuals diagnosed with T2D, who are established on the labor market and who lose their job in a mass layoff. Using a conditional difference-in-differences evaluation approach, our results give limited support for job loss having an impact on health behavior, diabetes progression, and cardiovascular risk factors.

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Health and Labor Markets
Type: Book
ISBN: 978-1-78973-861-2

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Book part
Publication date: 12 April 2012

Hartmut Lehmann, Tiziano Razzolini and Anzelika Zaiceva

In the years 2003–2008, the Russian economy experienced a period of strong and sustained growth, which was accompanied by large worker turnover and rising informality. We…

Abstract

In the years 2003–2008, the Russian economy experienced a period of strong and sustained growth, which was accompanied by large worker turnover and rising informality. We investigate whether the burden of informality falls disproportionately on job separators (displaced workers and quitters) in the Russian labor market in the form of informal employment and undeclared wages in formal jobs. We also pursue the issues whether displaced workers experience more involuntary informal employment than workers who quit and whether informal employment persists. We find a strong positive link between separations and informal employment as well as shares of undeclared wages in formal jobs. Our results also show that displacement entraps some of the workers in involuntary informal employment. Those who quit, in turn, experience voluntary informality for the most part, but there seems a minority of quitting workers who end up in involuntary informal jobs. This scenario does not fall on all separators but predominantly on those with low human capital. Finally, informal employment is indeed persistent since separating from an informal job considerably raises the probability to be informal in the subsequent job.

Details

Informal Employment in Emerging and Transition Economies
Type: Book
ISBN: 978-1-78052-787-1

Keywords

Abstract

Details

The Creation and Analysis of Employer-Employee Matched Data
Type: Book
ISBN: 978-0-44450-256-8

Article
Publication date: 28 October 2014

Marcus Eliason

The purpose of this paper is to examine the earnings, employment and income effects of job displacement among female assistant and auxiliary nurses – two hard-hit…

Abstract

Purpose

The purpose of this paper is to examine the earnings, employment and income effects of job displacement among female assistant and auxiliary nurses – two hard-hit female-dominated occupations – in Sweden during the economic crisis of the 1990s.

Design/methodology/approach

Using register data, assistant and auxiliary nurses who were displaced due to mass-layoffs during the crisis years were identified, as well as an appropriate control group. The study population could be followed for a maximum of 13 years. Mean effects were estimated using a propensity score weighted fixed effect estimator. In a supplementary analysis, propensity score weighted quantile effects were estimated.

Findings

Job loss among women in the public sector seems to have had similar earnings and employment consequences as previously found for job loss among men in the private sector. However, the social insurance system replaced a majority of the lost earnings. Moreover, a distributional analysis revealed that the income and earnings losses were limited to the lower part of the distributions.

Social implications

Budget consolidation measures to restore health to public finances in the aftermath of the Great Recession are likely to have long-lasting adverse consequences for some. Although many of those losing their jobs are likely to quickly regain employment at a comparable earnings level, the unlucky few may bear most of the costs.

Originality/value

The author is aware of no previously published research that has investigated either the impact of job displacement in the public sector or the distributional effect of job displacement.

Details

International Journal of Manpower, vol. 35 no. 8
Type: Research Article
ISSN: 0143-7720

Keywords

Book part
Publication date: 1 October 2008

Michael Bognanno and Lisa Delgado

The costs of job displacement are examined on a sample of Japanese workers successfully provided job placement services from 2000 to 2003, a period of economic stagnation…

Abstract

The costs of job displacement are examined on a sample of Japanese workers successfully provided job placement services from 2000 to 2003, a period of economic stagnation and structural change in Japan. We find that displaced workers suffer a loss of approximately $1,100 for each additional year of age. Workers also incur a large penalty when they change industries after being displaced. The age–earnings loss relationship is consistent with the operation of a delayed compensation scheme in large firms.

Details

Work, Earnings and Other Aspects of the Employment Relation
Type: Book
ISBN: 978-1-84950-552-9

Article
Publication date: 4 April 2016

Sérgio Lagoa and Fátima Suleman

– The purpose of this paper is to estimate the impact of industry and occupation skills on the wages of displaced workers due to firm closure.

Abstract

Purpose

The purpose of this paper is to estimate the impact of industry and occupation skills on the wages of displaced workers due to firm closure.

Design/methodology/approach

Using linked employer-employee data on displaced workers, this paper estimates the impact of industry and occupation tenure on post-displacement wage changes correcting for endogeneity with a multinomial logit model.

Findings

The evidence suggests that occupation has more specific skill requirements than industry. Displaced workers moving both industry and occupation suffer a higher wage decline than those changing only industry or occupation. Furthermore, the transferability of skills varies across occupations and industries; more specifically, intermediate-level occupations are more demanding in specific skills and impose higher wages losses for displaced workers. Finally, the economic crisis reduced the return on firm-specific skills only in some cases.

Practical implications

The examination of skill specificity/transferability helps firms, workers and policy makers to draw strategies and policies to improve their individual situation and social welfare. The analysis suggest that when experienced workers are displaced and forced to find a job in a different industry, they suffer considerable wage cuts. While displacement imposes costs to workers and society, different choices impact wages differently.

Originality/value

To the authors’ best knowledge, this is the first paper studying the simultaneous impact of industry and occupation tenure on wages using displaced workers due to firm closing. The paper also corrects for the selection of different alternatives after the displacement and uses data from a country characterised by low-job flows and low-worker flows. Finally, the impact of economic crises on return to skills is assessed.

Details

International Journal of Manpower, vol. 37 no. 1
Type: Research Article
ISSN: 0143-7720

Keywords

Article
Publication date: 1 January 1998

Nancy O. Cromwell and Janet C. Hunt‐McCool

We test two alternative hypotheses concerning the impact of union membership on the reemployment earnings of displaced workers and find support for the hypothesis that…

240

Abstract

We test two alternative hypotheses concerning the impact of union membership on the reemployment earnings of displaced workers and find support for the hypothesis that unions exert monopoly power in setting wages rather than providing any direct productivity enhancements. This effect holds in both the short run and over time.

Details

Studies in Economics and Finance, vol. 19 no. 1/2
Type: Research Article
ISSN: 1086-7376

Article
Publication date: 28 September 2012

Boniface Michael and Rashmi Michael

Outsourcing of information technology jobs outside the USA has resulted in social costs in the form of mass layoffs and displaced workers. The purpose of this paper is to…

1237

Abstract

Purpose

Outsourcing of information technology jobs outside the USA has resulted in social costs in the form of mass layoffs and displaced workers. The purpose of this paper is to show the social cost of outsourcing from a transaction cost economics (TCE) perspective.

Design/methodology/approach

The paper analyses the incidences of mass layoffs in sectors prone to outsourcing and its consequences on displaced workers. Mass Layoff Statistics (MLS) and the Displaced Workers Survey (DWS) data generated by the Bureau of Labor Statistics (BLS), USA, between 1996 and 2010, are examined for this purpose.

Findings

Outsourcing as a reason for mass layoffs has continued to persist up until 2010. Displaced workers experienced earnings losses after job losses and reemployment. The more educated workers had higher post displacement reemployment rates, while older persons suffered the most earnings losses.

Research limitations/implications

The data pertain to the period 1996 to 2010, including the “Dot Com Bubble Bust” and the “Great Recession.” Changes in data collection methods by BLS over this time period makes it difficult to compare some of the data.

Practical implications

For policy makers, managers and workers, this study focuses attention on the outsourcing by information technology dependent sectors and the accompanying social costs in the form of displaced workers.

Originality/value

Most papers focus on the efficiency gains of outsourcing but this paper focuses attention on the social cost of outsourcing, which is under‐researched and often overlooked.

Details

Management Research Review, vol. 35 no. 11
Type: Research Article
ISSN: 2040-8269

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