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Occupational Routine-Intensity and the Costs of Job Loss: Evidence from Mass Layoffs

Uwe Blien (), Wolfgang Dauth and Duncan Roth ()
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Uwe Blien: Institute for Employment Research (IAB), Nuremberg

No 12851, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyses how differences in the degree of occupational routine-intensity affect the costs of job loss. We use worker-level data on mass layoffs in Germany between 1980 and 2010 and provide causal evidence that workers who used to be employed in more routine-intensive occupations suffer larger and more persistent earnings losses after the mass layoff. Furthermore, we are able to show that, at least initially, earnings losses are primarily due to a reduction in the number of days in employment, suggesting that routine-intensive workers face considerable frictions in the adjustment to job loss. Conditional on finding a new job, routine-intensive workers are more likely to change their occupations but end up systematically in the lower end of their new occupation's wage distribution.

Keywords: routine-replacing technological change; routine-intensity; labour market biographies; mass layoffs; Germany; difference-in-differences (search for similar items in EconPapers)
JEL-codes: J24 J63 O33 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2019-12
New Economics Papers: this item is included in nep-eur and nep-lab
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