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Job loss by wage level: lessons from the Great Recession in Ireland

Author

Listed:
  • Brian Nolan

    (University of Oxford)

  • Sarah Voitchovsky

    (University of Melbourne)

Abstract

This paper explores the incidence of job loss by wage level during the Great Recession, using data for Ireland. Ireland experienced a particularly pronounced decline in employment by international and historical standards, which makes it a valuable case study. Using EU Survey on Income and Living Conditions (EU-SILC) data, our analysis reveals that the probability that an employee remains in employment, from one year to the next, is positively related to their monthly earnings during both boom and bust. The gradient with wages, however, is much more marked during the bust and remains significantly so even after controlling for a range of individual characteristics including gender, age, education, labour market history, part-time status, industries or occupations. JEL codes: E24, J23, J24, J62, J63

Suggested Citation

  • Brian Nolan & Sarah Voitchovsky, 2016. "Job loss by wage level: lessons from the Great Recession in Ireland," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-29, December.
    • Handle: RePEc:spr:izaels:v:5:y:2016:i:1:d:10.1186_s40174-016-0057-2
    DOI: 10.1186/s40174-016-0057-2
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    1. Aedín Doris & Donal O’Neill & Olive Sweetman, 2015. "Wage flexibility and the great recession: the response of the Irish labour market," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-24, December.
    2. Christopher L. Foote & Richard W. Ryan, 2015. "Labor-Market Polarization over the Business Cycle," NBER Macroeconomics Annual, University of Chicago Press, vol. 29(1), pages 371-413.
    3. Savage, Micheal & Callan, Tim & Nolan, Brian & Colgan, Brian, 2015. "The Great Recession, Austerity and Inequality: Evidence from Ireland," Papers WP499, Economic and Social Research Institute (ESRI).
    4. Michael W. L. Elsby & Bart Hobijn & Aysegul Sahin, 2010. "The Labor Market in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 1-69.
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    6. Kelly, Elish & McGuinness, Seamus, 2015. "Impact of the Great Recession on unemployed and NEET individuals’ labour market transitions in Ireland," Economic Systems, Elsevier, vol. 39(1), pages 59-71.
    7. McGinnity, Fran & Russell, Helen & Watson, Dorothy & Kingston, Gillian & Kelly, Elish, 2014. "Winners and Losers? The Equality Impact of the Great Recession in Ireland," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT265.
    8. Goldthorpe, John H. & McKnight, Abigail, 2004. "The economic basis of social class," LSE Research Online Documents on Economics 6312, London School of Economics and Political Science, LSE Library.
    9. Robert A. Margo, 1993. "Employment and Unemployment in the 1930s," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 41-59, Spring.
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    Cited by:

    1. Jean-Denis Garon & Catherine Haeck & Simon Bourassa-Viau, 2020. "Going Back to School Takes Time: Evidence from a Negative Trade Shock," Working Papers 20-01, Research Group on Human Capital, University of Quebec in Montreal's School of Management.
    2. Niamh Holton & Donal O'Neill, 2017. "The Changing Nature of Irish Wage Inequality from Boom to Bust," The Economic and Social Review, Economic and Social Studies, vol. 48(1), pages 1-26.
    3. Bourassa-Viau, Simon & Garon, Jean-Denis & Haeck, Catherine, 2022. "Educational choices and labour market outcomes in times of crisis," Economics of Education Review, Elsevier, vol. 88(C).
    4. Kanika Kapur, 2020. "Private Health Insurance in Ireland: Trends and Determinants," The Economic and Social Review, Economic and Social Studies, vol. 51(1), pages 63-92.
    5. Laurence, James & Sprong, Stefanie & McGinnity, Frances & Russell, Helen & Hingre, Garance, 2024. "Changing social and political attitudes in Ireland and Northern Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS170.
    6. Pora, Pierre & Wilner, Lionel, 2020. "A decomposition of labor earnings growth: Recovering Gaussianity?," Labour Economics, Elsevier, vol. 63(C).
    7. Martina Bisello & Vincenzo Maccarrone & Enrique Fernández-Macías, 2022. "Occupational mobility, employment transitions and job quality in Europe: The impact of the Great Recession," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(2), pages 585-611, May.

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    More about this item

    Keywords

    Skills; Occupations; Wages; Great recession; Ireland; Job loss; EU-SILC;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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