Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set

No 2289, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines the long-term earnings losses of displaced workers in Portugal, using a nationally representative longitudinal linked employer-employee data set. The results show that four years after displacement the earnings of displaced workers remain around 9% (women) to 12% (men) below their counterfactual expected levels. The post-displacement earnings losses are mainly associated with the loss of tenure within the firm and, to a lesser extent, to the loss of sector-specific features. Furthermore, workers who experienced a spell of nonemployment are the most affected by job displacement. Finally, this study points to the importance of controlling for employers' characteristics in this type of wages-dynamic analysis, since there are systematic differences in earnings between displaced and non-displaced workers that stem from differences in firm characteristics. Ignoring them may confound the evaluation of the earnings losses.

Keywords: displacement; earnings losses; firm-specific human capital (search for similar items in EconPapers)
JEL-codes: J31 J63 J65 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2006-09
New Economics Papers: this item is included in nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Related works:
Working Paper: Earnings Losses of Displaced Workers: Evidence from a Matched Employer-employee Data Set (2006)
Working Paper: Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set (2006)
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