Effects of mass layoffs on local employment—evidence from geo-referenced data

Philipp vom Berge and Achim Schmillen

Journal of Economic Geography, 2023, vol. 23, issue 3, 509-539

Abstract: Using an event study approach and a novel data set that links administrative information on German establishments with exact distance measures from geo-referenced address data, we analyze the net impact of mass layoffs on local employment. We find that local spillovers significantly attenuate the direct impact of mass layoffs on municipal-level employment. About a quarter of the 1-year direct employment loss due to a mass layoff event is absorbed within the same municipality. Local spillovers are especially pronounced very close to the mass layoff site; the majority of the absorption is concentrated within a 1000-m radius. There is little evidence of spillovers beyond the affected municipality.

Keywords: Mass layoffs; local spillovers; geo-referenced data (search for similar items in EconPapers)
JEL-codes: J64 J65 R12 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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