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Earnings Losses of Displaced Workers

Louis S Jacobson, Robert LaLonde and Daniel Sullivan

American Economic Review, 1993, vol. 83, issue 4, 685-709

Abstract: The authors exploit administrative data combining workers' earnings histories with information about their firms to estimate the magnitude and temporal pattern of displaced workers' earnings losses. They find that high-tenure workers separating from distressed firms suffer long-term losses averaging 25 percent per year. In addition, the authors find that displaced workers' losses (1) begin mounting before their separations; (2) depend only slightly on their age and sex; (3) depend more on local labor-market conditions and their former industries; (4) are not, however, limited to those in a few sectors; and (5) are large even for those who find new jobs in similar firms. Copyright 1993 by American Economic Association.

Date: 1993
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Working Paper: Earnings losses of displaced workers (1992)
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Handle: RePEc:aea:aecrev:v:83:y:1993:i:4:p:685-709