The Costs of Job Displacement over the Business Cycle and Its Sources: Evidence from Germany∗
نویسندگان
چکیده
We document the sources behind costs of job loss over the business cycle using administrative data from Germany. Losses in annual earnings in Germany after displacement are large, persistent, and highly cyclical, nearly doubling in size during economic downturns. We show that part of these losses and their cyclicality is driven by unemployment. However, the longer-term earnings losses we find and their cyclicality are mainly driven by declines in wages. An important factor behind the long-lasting declines in wages and their cyclicality are changes in employer characteristics, as workers switch to smaller and lower-paying firms after job displacement, in particular in recessions. The findings point to important and persistent effects of luck in the labor market that employment-based programs such as unemployment insurance can only partly offset. ∗ We would like to thank Research Data Center of the Institute for Employment Research (IAB) for generously providing the data and support with running programs remotely. We would like to thank Stefan Bender, David Card, Pat Kline, Kevin Lang, Daniele Paserman, as well as seminar participants at Boston University, UC Berkeley, and the Verein fuer Sozialpolitik Meeting for many helpful comments. All errors are our own. † [email protected] ‡ [email protected] § [email protected]
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تاریخ انتشار 2018