Labor turnover before plant closure: "Leaving the sinking ship" vs. "Captain throwing ballast overboard"

Guido Schwerdt

Labour Economics, 2011, vol. 18, issue 1, 93-101

Abstract: Involuntary job loss in administrative data is commonly identified by exploiting the exogenous nature of mass layoffs or plant closures. However, prior knowledge can lead to selection in the labor turnover of distressed firms. This paper proposes a simple method to determine if and when selective turnover sets in. Based on a rich administrative data set for Austria, we show that separations up to two quarters before plant closure should be included in the treatment group. Moreover, we find that early leavers are associated with significantly lower costs of job loss due to plant closure.

Keywords: Plant; closure; Labor; turnover; Exact; matching; Employer-employee; data (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (90)

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Working Paper: Labor Turnover before Plant Closure: ‘Leaving the Sinking Ship’ vs. ‘Captain Throwing Ballast Overboard’ (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:18:y:2011:i:1:p:93-101

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