IDEAS home Printed from https://ideas.repec.org/p/ecm/wc2000/1566.html
   My bibliography  Save this paper

Wage Losses of Displaced Workers in France and the US?

Author

Listed:
  • Arnaud Lefranc

    (Universite Paris 10)

Abstract

This paper develops a theoretical search framework to analyse the wage losses experienced by displaced workers. We underline the importance of accounting for two different sources of wage losses whose consequences might differ, namely the loss of rents earned on their pre-displacement job and the loss of accumulated firm-specific human capital. We then turn to the measurement and decomposition of wage losses in France and the US using micro data from labor force surveys. We show that while the order of magnitude of wage losses ar comparable in the two economies (10 to 15\%), the sources of wage adjustment differ strongly: all of the wage decline in France seems to be due to the loss of accumulated firm specific earning potential, while in the US\ case, they only account for half of the total wage adjustment.

Suggested Citation

  • Arnaud Lefranc, 2000. "Wage Losses of Displaced Workers in France and the US?," Econometric Society World Congress 2000 Contributed Papers 1566, Econometric Society.
    • Handle: RePEc:ecm:wc2000:1566
    as

    Download full text from publisher

    File URL: http://fmwww.bc.edu/RePEc/es2000/1566.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-380, October.
    2. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    3. Cohen, Daniel & Lefranc, Arnaud & Saint-paul, 1997. "French unemployment : a transatlantique perspective," CEPREMAP Working Papers (Couverture Orange) 9705, CEPREMAP.
    4. Leonard, Jonathan & Van Audenrode, Marc, 1995. "The Duration of Unemployment and the Persistence of Wages," CEPR Discussion Papers 1227, C.E.P.R. Discussion Papers.
    5. Addison, John T & Portugal, Pedro, 1989. "Job Displacement, Relative Wage Changes, and Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 281-302, July.
    6. Daniel Cohen & Arnaud Lefrance & Gilles Saint-Paul, 1997. "French unemployment: a transatlantic perspective," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 12(25), pages 266-291.
    7. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 437-459.
    8. Mortensen, Dale T., 1987. "Job search and labor market analysis," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 15, pages 849-919, Elsevier.
    9. repec:eee:labchp:v:2:y:1986:i:c:p:849-919 is not listed on IDEAS
    10. William J. Carrington, 1993. "Wage Losses for Displaced Workers: Is It Really the Firm That Matters?," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 435-462.
    11. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    12. Kenneth Burdett & Dale T. Mortensen, 1989. "Equilibrium Wage Differentials and Employer Size," Discussion Papers 860, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    13. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-297, June.
    14. Arnaud Lefranc, 1997. "Quelques éléments de comparaison des taux de chômage français et américain," Économie et Statistique, Programme National Persée, vol. 301(1), pages 61-72.
    15. Houle, Mario & Van Audenrode, Marc, 1995. "Job displacement, wages, and unemployment duration in Canada," Labour Economics, Elsevier, vol. 2(1), pages 77-91, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Garcia Perez, Jose Ignacio & Rebollo Sanz, Yolanda, 2005. "Wage changes through job mobility in Europe: A multinomial endogenous switching approach," Labour Economics, Elsevier, vol. 12(4), pages 531-555, August.
    2. A. Davia, Maria, 2005. "Job mobility and wage mobility at the beginning of the working career: a comparative view across Europe," ISER Working Paper Series 2005-03, Institute for Social and Economic Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arnaud Lefranc, 2002. "Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United-States," THEMA Working Papers 2002-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    2. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
    3. Burda, Michael C. & Mertens, Antje, 2001. "Estimating wage losses of displaced workers in Germany," Labour Economics, Elsevier, vol. 8(1), pages 15-41, January.
    4. Herz, Benedikt, 2017. "Specific Human Capital and Wait Unemployment," MPRA Paper 76777, University Library of Munich, Germany.
    5. Moshe Buchinsky & Denis Fougère & Francis Kramarz & Rusty Tchernis, 2002. "Interfirm Mobility, Wages and the Returns to Seniority and Experience in the U.S," Working Papers 2002-29, Center for Research in Economics and Statistics.
    6. Carneiro, Anabela & Portugal, Pedro, 2006. "Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set," IZA Discussion Papers 2289, Institute of Labor Economics (IZA).
    7. Alfonso Rosolia & Gilles Saint Paul, 1998. "The effect of unemployment spells on subsequent wages in Spain," Economics Working Papers 295, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Joseph G. Altonji & Nicolas Williams, 1992. "The Effects of Labor Market Experience, Job Seniority, and Job Mobility on Wage Growth," NBER Working Papers 4133, National Bureau of Economic Research, Inc.
    9. Joseph G. Altonji & Nicolas Williams, 2005. "Do Wages Rise with Job Seniority? A Reassessment," ILR Review, Cornell University, ILR School, vol. 58(3), pages 370-397, April.
    10. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    11. Andrew Weiss, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-154, Fall.
    12. Joseph G. Altonji & Anthony A. Smith Jr. & Ivan Vidangos, 2013. "Modeling Earnings Dynamics," Econometrica, Econometric Society, vol. 81(4), pages 1395-1454, July.
    13. Bent Jesper Christensen & Rasmus Lentz & Dale T. Mortensen & George R. Neumann & Axel Werwatz, 2005. "On-the-Job Search and the Wage Distribution," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 31-58, January.
    14. Wang, Ruqu & Weiss, Andrew, 1998. "Probation, layoffs, and wage-tenure profiles: A sorting explanation," Labour Economics, Elsevier, vol. 5(3), pages 359-383, September.
    15. Ridder, G. & Visser, N. de & Berg, G.J. van den, 1996. "Structural aspects of the labor markets of five OECD countries," Serie Research Memoranda 0046, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    16. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    17. Paul Hek & Daniel Vuuren, 2011. "Are older workers overpaid? A literature review," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(4), pages 436-460, August.
    18. William J. Carrington & Bruce Fallick, 2014. "Why Do Earnings Fall with Job Displacement?," Working Papers (Old Series) 1405, Federal Reserve Bank of Cleveland.
    19. Pedro Portugal & John T. Addison, 2022. "Retrieving the Returns to Experience, Tenure, and Job Mobility from Work Histories," Working Papers w202221, Banco de Portugal, Economics and Research Department.
    20. Sullivan, Paul, 2010. "Empirical evidence on occupation and industry specific human capital," Labour Economics, Elsevier, vol. 17(3), pages 567-580, June.
    21. Kuhn, Peter & Sweetman, Arthur, 1999. "Vulnerable Seniors: Unions, Tenure, and Wages Following Permanent Job Loss," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 671-693, October.
    22. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:1566. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/essssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.