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Reconsidering the Consequences of Worker Displacements: Firm versus Worker Perspective†

Reconsidering the Consequences of Worker Displacements: Firm versus Worker Perspective† AbstractPrior literature has established that displaced workers suffer persistent earnings losses by following workers in administrative data after mass layoffs. This literature assumes that these are involuntary separations owing to economic distress. This paper examines this assumption by matching survey data on worker-supplied reasons for separations with administrative data. Workers exhibit substantially different earnings dynamics in mass layoffs depending on the reason for separation. Using a new methodology to account for the increased separation rates across all survey responses during a mass layoff, the paper finds earnings loss estimates that are surprisingly close to those using only administrative data. (JEL E32, J31, J63, J64, J65) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Macroeconomics American Economic Association

Reconsidering the Consequences of Worker Displacements: Firm versus Worker Perspective†

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Publisher
American Economic Association
Copyright
Copyright © 2019 © American Economic Association
ISSN
1945-7715
DOI
10.1257/mac.20170162
Publisher site
See Article on Publisher Site

Abstract

AbstractPrior literature has established that displaced workers suffer persistent earnings losses by following workers in administrative data after mass layoffs. This literature assumes that these are involuntary separations owing to economic distress. This paper examines this assumption by matching survey data on worker-supplied reasons for separations with administrative data. Workers exhibit substantially different earnings dynamics in mass layoffs depending on the reason for separation. Using a new methodology to account for the increased separation rates across all survey responses during a mass layoff, the paper finds earnings loss estimates that are surprisingly close to those using only administrative data. (JEL E32, J31, J63, J64, J65)

Journal

American Economic Journal: MacroeconomicsAmerican Economic Association

Published: Apr 1, 2019

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