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The costs of job loss and task usage: Do social tasks soften the drop?

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  • Antti Kauhanen

    (Etla Econonomic Research
    Jyväskylä University School of Business and Economics)

  • Krista Riukula

    (Etla Econonomic Research)

Abstract

Do different tasks shield differently from the scarring effects of job loss? This study examines how the effects of job loss depend on task usage. We use Finnish linked employer–employee data from 2001 to 2016, representative survey data on task usage, and plant closures to identify individuals who involuntarily lose their jobs. We find that heterogeneity in the cost of job loss is linked to task usage. Workers in more social task-intensive origin jobs have smaller employment and earnings losses, whereas workers in routine jobs face larger wage losses. The probability of being employed is 8.3 pp higher (3.9 pp lower) per one standard deviation higher than mean social (routine) task usage 1 year after the job loss event. We also find that workers with longer tenure face larger losses and that task usage contributes more to their losses. The results show that the costs of job loss depend on task usage in the origin job. Public policy measures should be targeted at employees in routine-intensive jobs, since they face the largest losses.

Suggested Citation

  • Antti Kauhanen & Krista Riukula, 2024. "The costs of job loss and task usage: Do social tasks soften the drop?," Empirical Economics, Springer, vol. 67(4), pages 1355-1374, October.
    • Handle: RePEc:spr:empeco:v:67:y:2024:i:4:d:10.1007_s00181-024-02595-y
    DOI: 10.1007/s00181-024-02595-y
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    More about this item

    Keywords

    Job loss; Earnings loss; Linked employer–employee data; Specific human capital; Task usage;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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