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The Gender Gap in Earnings Losses after Job Displacement

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  • Hannah Illing
  • Johannes F. Schmieder
  • Simon Trenkle

Abstract

Existing research has shown that job displacement leads to large and persistent earnings losses for men, but evidence for women is scarce. Using administrative data from Germany, we apply an event study design in combination with propensity score matching and a reweighting technique to directly compare men and women who are displaced from similar jobs and firms. Our results show that after a mass layoff, women’s earnings losses are about 35% higher than men’s, with the gap persisting five years after job displacement. This is partly explained by a higher propensity of women to take up part-time or marginal employment following job loss, but even full-time wage losses are almost 50% (or 5 percentage points) higher for women than for men. We then show that on the household level there is no evidence of an added worker effect, independent of the gender of the job loser. Finally, we document that parenthood magnifies the gender gap sharply: while fathers of young children have smaller earnings losses than men in general, mothers of young children have much larger earnings losses than other women.

Suggested Citation

  • Hannah Illing & Johannes F. Schmieder & Simon Trenkle, 2021. "The Gender Gap in Earnings Losses after Job Displacement," NBER Working Papers 29251, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:29251
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    Cited by:

    1. Ines Helm & Alice Kuegler & Uta Schoenberg, 2023. "Displacement Effects in Manufacturing and Structural Change," RF Berlin - CReAM Discussion Paper Series 2313, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    2. Mária Balgová & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," CRC TR 224 Discussion Paper Series crctr224_2023_457, University of Bonn and University of Mannheim, Germany.
    3. Bardits, Anna & Adamecz, Anna & Bisztray, Márta & Weber, Andrea & Szabo-Morvai, Agnes, 2023. "Precautionary Fertility: Conceptions, Births, and Abortions around Employment Shocks," CEPR Discussion Papers 17988, C.E.P.R. Discussion Papers.
    4. Ria Ivandic & Anne Sophie Lassen, 2023. "Gender Gaps From Labor Market Shocks," Upjohn Working Papers 23-387, W.E. Upjohn Institute for Employment Research.
    5. Mattis Beckmannshagen & Rick Glaubitz, 2023. "Is There a Desired Added Worker Effect?: Evidence from Involuntary Job Losses," SOEPpapers on Multidisciplinary Panel Data Research 1200, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Eloiza Regina Ferreira de Almeida & Renata Narita, 2024. "The gender difference in wage losses after leaving formal employment in Brazil," Working Papers, Department of Economics 2024_01, University of São Paulo (FEA-USP).
    7. Koerner, Konstantin & Borrs, Linda & Eppelsheimer, Johann, 2023. "FDI and onshore job stability: Upgrades, downgrades, and separations in multinationals," European Economic Review, Elsevier, vol. 152(C).
    8. Balgova, Maria & Illing, Hannah, 2023. "Job Displacement and Migrant Labor Market Assimilation," IZA Discussion Papers 16349, Institute of Labor Economics (IZA).
    9. Ivandić, Ria & Lassen, Anne Sophie, 2023. "Gender gaps from labor market shocks," LSE Research Online Documents on Economics 119948, London School of Economics and Political Science, LSE Library.
    10. Ivandić, Ria & Lassen, Anne Sophie, 2023. "Gender gaps from labor market shocks," Labour Economics, Elsevier, vol. 83(C).
    11. Philippe, Arnaud & Skandalis, Daphné, 2023. "Motherhood and the Cost of Job Search," IZA Discussion Papers 16669, Institute of Labor Economics (IZA).
    12. Lochner, Benjamin & Merkl, Christian, 2022. "Gender-specific application behavior, matching, and the residual gender earnings gap," FAU Discussion Papers in Economics 04/2022, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    13. Seema Jayachandran & Lea Nassal & Matthew Notowidigdo & Marie Paul & Heather Sarsons, 2024. "Moving to Opportunity, Together," Working Papers 326, Princeton University, Department of Economics, Center for Economic Policy Studies..
    14. Maria Balgova & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," ECONtribute Discussion Papers Series 246, University of Bonn and University of Cologne, Germany.
    15. Connolly, Laura E. & Jolly, Nicholas A., 2024. "Temporal Changes to the Added Worker Effect Associated with Spousal Job Loss," GLO Discussion Paper Series 1454, Global Labor Organization (GLO).
    16. Hannah Illing & Hanna Schwank & Linh T. Tô, 2024. "Hiring and the Dynamics of the Gender Gap," ECONtribute Discussion Papers Series 339, University of Bonn and University of Cologne, Germany.
    17. Illing, Hannah & Koch, Theresa, 2021. "Who Suffers the Greatest Loss? Costs of Job Displacement for Migrants and Natives," IAB-Discussion Paper 202108, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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