Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United States

Arnaud Lefranc

William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: The objective of this paper is to provide a comparative assessment of the consequences of worker displacement in France and the United States. I estimate wage losses of displaced workers in the two countries and examine the relative contribution of two important sources of post-displacement wage adjustments. The first one relates to the loss of seniority-accumulated firmspecific earnings potential. The second one arises from match heterogeneity. Identification of the relative contribution of these two sources can be achieved given separate estimates of returns to seniority. I show that, while the order of magnitude of total wage losses are comparable in the two economies (10 to 15%), the sources of wage adjustments di_er strongly: all of the wage decline in France seems to be due to the loss of accumulated firm-specific earnings potential, while in the US, more than half of measured wage losses arise from a downgrading of displaced workers into lower quality job matches.

Keywords: Wage losses; Unemployment; Displaced workers; Returns to seniority; Match heterogeneity (search for similar items in EconPapers)
JEL-codes: J31 J63 J64 J65 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2003-09-01
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Working Paper: Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United-States (2002)
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