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

29 Pages Posted: 17 Sep 2006

See all articles by Anabela Jesus Moreira Carneiro

Anabela Jesus Moreira Carneiro

Universidade do Porto - Faculdade de Economia (FEP)

Pedro Portugal

Bank of Portugal - Research Department; New University of Lisbon; IZA Institute of Labor Economics

Date Written: September 2006

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 nondisplaced 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

JEL Classification: J31, J63, J65

Suggested Citation

Carneiro, Anabela Jesus Moreira and Portugal, Pedro, Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set (September 2006). IZA Discussion Paper No. 2289, Available at SSRN: https://ssrn.com/abstract=930601

Anabela Jesus Moreira Carneiro

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

Pedro Portugal (Contact Author)

Bank of Portugal - Research Department ( email )

Av. Almirante Reis 71, 6th
Lisbon 1150-012
Portugal
+351 21 313 0000 (Phone)
+351 21 814 3841 (Fax)

New University of Lisbon

Lisbon, 1099-085
Portugal

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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