The Unequal Cost of Job Loss across Countries

Antoine Bertheau, Edoardo Acabbi (), Cristina Barcelo (), Andreas Gulyas, Stefano Lombardi and Raffaele Saggio ()
Additional contact information
Edoardo Acabbi: Universidad Carlos III de Madrid
Cristina Barcelo: Bank of Spain
Raffaele Saggio: University of British Columbia

No 15033, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We document the consequences of losing a job across countries using a harmonized research design. 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 accounts for 40% to 95% of within-country wage declines. The use of active labor market policies predicts a significant portion of the cross-country heterogeneity in earnings losses.

Keywords: labor market institutions; layoffs; labor turnover; wage dynamics; job loss costs; cross-country matched employer–employee dataset (search for similar items in EconPapers)
JEL-codes: J30 J63 J64 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2022-01
New Economics Papers: this item is included in nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Published - published in: American Economic Review: Insights, 2023, 5 (3), 393-408

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