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The Unequal Consequences of Job Loss across Countries

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  • Antoine Bertheau
  • Edoardo Maria Acabbi
  • Cristina Barcelo
  • Andreas Gulyas
  • Stefano Lombardi
  • Raffaele Saggio

Abstract

We document the consequences of losing a job across countries using a harmonized research design applied to seven matched employer-employee datasets. Workers in Denmark and Sweden experience the lowest earnings declines following job displacement, while workers in Italy, Spain, and Portugal experience losses three times as high. French and Austrian workers face earnings losses somewhere in between. Key to these differences is that Southern European workers are less likely to find employment following displacement. Loss of employer-specific wage premiums explains a substantial portion of wage losses in all countries.

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  • Antoine Bertheau & Edoardo Maria Acabbi & Cristina Barcelo & Andreas Gulyas & Stefano Lombardi & Raffaele Saggio, 2022. "The Unequal Consequences of Job Loss across Countries," NBER Working Papers 29727, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29727
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    2. Jose Garcia‐Louzao & Marta Silva, 2024. "Coworker networks and the labor market outcomes of displaced workers: Evidence from Portugal," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(3), pages 389-413, July.
    3. Antonio Martins-Neto & Xavier Cirera & Alex Coad, 2024. "Routine-biased technological change and employee outcomes after mass layoffs: evidence from Brazil," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 33(3), pages 555-583.
    4. 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.
    5. Arntz, Melanie & Ivanov, Boris & Pohlan, Laura, 2022. "Regional Structural Change and the Effects of Job Loss," IZA Discussion Papers 15313, Institute of Labor Economics (IZA).
    6. Gottfries, Axel & Teulings, Coen, 2023. "Returns to on-the-job search and wage dispersion," Labour Economics, Elsevier, vol. 80(C).
    7. Paul Brandily & Camille Hémet & Clément Malgouyres, 2022. "Understanding the Reallocation of Displaced Workers to Firms," PSE Working Papers halshs-03082302, HAL.
    8. Gulyas, Andreas & Meier, Matthias & Ryzhenkov, Mykola, 2024. "Labor market effects of monetary policy across workers and firms," European Economic Review, Elsevier, vol. 166(C).
    9. Victor Hernandez Martinez & Kaixin Liu, 2022. "The Value of Unemployment Insurance: Liquidity vs. Insurance Value," Working Papers 22-16, Federal Reserve Bank of Cleveland.
    10. Carreño Bustos, José Gabo & Huizinga, Harry & Uras, Burak, 2024. "Flexible Labor Contracts, Firm-specific Pay, and Wages," Discussion Paper 2024-010, Tilburg University, Center for Economic Research.
    11. Guilherme Amorim & Diogo Britto & Alexandre Fonseca & Breno Sampaio, 2022. "Job Loss, Unemployment Insurance and Health: Evidence from Brazil," BAFFI CAREFIN Working Papers 22192, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    12. Rud, Juan-Pablo & Simmons, Michael & Toews, Gerhard & Aragon, Fernando, 2024. "Job displacement costs of phasing out coal," Journal of Public Economics, Elsevier, vol. 236(C).
    13. Serdar Birinci & Youngmin Park & Kurt See, 2023. "The Heterogeneous Impacts of Job Displacement: Evidence from Canadian Job Separation Records," Working Papers 2023-022, Federal Reserve Bank of St. Louis, revised 14 Nov 2024.
    14. Hirvonen, Johannes & Kässi, Otto & Ropponen, Olli, 2023. "Jobs, Workers, and Firms: Dissecting the Labour Market Effects of Finland’s COVID-19 Subsidy Program," ETLA Working Papers 111, The Research Institute of the Finnish Economy.
    15. Tito Boeri & Pierre Cahuc, 2022. "Labor Market Insurance Policies in the XXI Century," SciencePo Working papers Main hal-03878719, HAL.
    16. Ivan Lagrosa, 2022. "Income dynamics in dual labor markets," Working Papers wp2022_2209, CEMFI.
    17. Matías Ciaschi, 2020. "Job loss and household labor supply adjustments in developing countries: Evidence from Argentina," CEDLAS, Working Papers 0271, CEDLAS, Universidad Nacional de La Plata.
    18. Miele, Kai R., 2024. "Mental Health and Labor Market Effects of Anticipating Job Loss," CINCH Working Paper Series (since 2020) 82169, Duisburg-Essen University Library, DuEPublico.
    19. Sabrina Di Addario & Patrick Kline & Raffaele Saggio & Mikkel Soelvsten, 2022. "It ain't where you're from it's where you're at: firm effects, state dependence, and the gender wage gap," Temi di discussione (Economic working papers) 1374, Bank of Italy, Economic Research and International Relations Area.

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    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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