Abstract
This paper studies the consequences of job loss for workers, and explores differences in the cost of displacement using a novel research design. While the previous literature relies on mass layoffs and plant closures for identification, I exploit discontinuities in the likelihood of displacement generated by a last-in-first-out (LIFO) rule used at layoffs in Sweden. Matching data on individual layoff notifications to administrative records, I find that permanent earnings losses are present only among workers who lose their job during mass layoffs, whereas workers displaced in smaller layoffs fully recover within 7 years. The finding is robust to differences in overall economic conditions as well as industry and worker com position. Auxiliary analysis suggests that mass layoffs affect the entire local labor market thereby amplifying the effect of displacement.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
