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Coping with job loss: evidence from military base closures

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  • Matz Dahlberg
  • Linna Martén
  • Björn Öckert

Abstract

We examine how workers adjust in response to an unexpected job loss. Using the closure of military bases in Sweden, we find that displaced workers experience permanent income losses and immediately adjust along two main channels: regional and sector mobility. Displaced military workers are more likely to move to another municipality, start commuting, and change sectors. We also find that workers with mobility restrictions are less likely to change regions and they exhibit lower earnings in the longer run, a result that might help to explain some of the permanent income losses found in the literature.

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  • Matz Dahlberg & Linna Martén & Björn Öckert, 2024. "Coping with job loss: evidence from military base closures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 126(3), pages 440-464, July.
    • Handle: RePEc:bla:scandj:v:126:y:2024:i:3:p:440-464
    DOI: 10.1111/sjoe.12557
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