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Unequal worker exposure to establishment deaths

Hugh Macartney, Eric Nielsen () and Viviana Rodriguez

Labour Economics, 2021, vol. 73, issue C

Abstract: It is well understood that adverse economic shocks affect workers nonuniformly. We explore a new channel through which unequal employment outcomes may emerge during a downturn: displacement through the extensive margin of establishment deaths. Intuitively, workers who are concentrated in less resilient establishments prior to an economic decline will be disproportionately affected by its onset. Using rich administrative employment and establishment data for the United States, we show that Black workers bore the brunt of the Great Recession in terms of within-industry employment changes arising from establishment deaths. This finding has important implications for the evolution of worker disparities during future downturns.

Keywords: Economic shocks; Worker inequality; Establishment deaths; Employment; Firm resilience; Industry composition; Gap; Disparity; Decomposition (search for similar items in EconPapers)
JEL-codes: E24 J21 R12 R23 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.labeco.2021.102073

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