The Heterogeneous Impacts of Job Displacement: Evidence from Canadian Job Separation Records

Serdar Birinci, Youngmin Park and Kurt See

Staff Working Papers from Bank of Canada

Abstract: When estimating earnings losses upon job separations, existing strategies focus on separations in mass layoffs to distinguish involuntary separations from voluntary separations. We revisit the measurement of the sources and consequences of involuntary separations using Canadian job separation records. We refine existing strategies and find that only a quarter of mass-layoff separations are indeed layoffs. We provide guidance on how to effectively filter out spurious separations when using databases with sparse information on separations. Isolating involuntary mass-layoff separations with our data, we find twice the earnings losses relative to existing estimates. We uncover significant heterogeneity in losses for separations with different reasons and timing, ranging from 10% for quits after a mass layoff to 60% for layoffs before it. Our findings are relevant for quantitative models that take earnings loss estimates as key inputs to discipline parameters, analyze mechanisms behind these losses, and evaluate policy.

Keywords: Labour markets; Potential output; Productivity (search for similar items in EconPapers)
JEL-codes: E24 E32 J31 J63 J65 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2023-10
New Economics Papers: this item is included in nep-lab
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Related works:
Working Paper: The Heterogeneous Impacts of Job Displacement: Evidence from Canadian Job Separation Records (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:23-55

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