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Job Ladders and Earnings of Displaced Workers

Pawel Krolikowski ()

American Economic Journal: Macroeconomics, 2017, vol. 9, issue 2, 1-31

Abstract: Workers who suffer job displacement experience surprisingly large and persistent earnings losses. This paper proposes an explanation for this robust empirical puzzle in a model of search with a significant job ladder and increased separation rates for the recently hired. In addition to capturing the depth and persistence of displaced worker earnings losses, the model matches: employment-to-nonemployment and employer-to-employer probabilities by tenure; the empirical decomposition of earnings losses into reduced wages and employment; observed wage dispersion; and the distribution of wage changes around a nonemployment event.

JEL-codes: J31 J63 J64 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/mac.20140064
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Working Paper: Job Ladders and Earnings of Displaced Workers (2015) Downloads
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Handle: RePEc:aea:aejmac:v:9:y:2017:i:2:p:1-31