Long‐term effects of public policy for displaced workers in Sweden

Abstract

PurposeThe purpose of this paper is to study the long‐term effects of policy measures for displaced workers. The focus is on the individuals affected by the closure of the Uddevalla Shipyard in western Sweden in 1985 and the cutbacks at the LKAB mines in northern Sweden in 1983.Design/methodology/approachThese workers not only experienced job loss, but were also target groups for extraordinary labour market policies. Using register data from Statistics Sweden (labour market status, earnings, education etc.), the authors follow those affected until 1999, comparing their experiences with the development of a large sample of other workers who lost their jobs because of plant closures in 1987‐1988 but who did not receive extraordinary measures.FindingsEstimations of the net effect of the extraordinary measures find that they did have positive long‐term effects for the displaced shipyard workers and miners. They have higher employment, not higher unemployment, and higher earnings than the comparison group.Originality/valueThe authors are not aware of any previous research on the effects of labour market policy addressing displacement in the long term.