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The Costs of Job Displacement over the Business Cycle and Its Sources: Evidence from Germany

Author

Listed:
  • Schmieder, Johannes F.

    (Boston University ; NBER ; CEPR ; IZA)

  • Wachter, Till von

    (University of California, Los Angeles ; NBER ; CEPR ; IZA)

  • Heining, Jörg

    (Institute for Employment Research (IAB), Nuremberg, Germany)

Abstract

"We document the sources behind the costs of job loss over the business cycle using administrative data from Germany. Losses in annual earnings after displacement are large, persistent, and highly cyclical, nearly doubling in size during downturns. A large part of the long-term earnings losses and their cyclicality is driven by declines in wages. Key to these long-lasting wage declines and their cyclicality are changes in employer characteristics, as displaced workers switch to lower-paying firms. Changes in characteristics of workers or displacing firms explain little of the cyclicality, though nonemployment durations correlated with losses in employer effects play a role." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Schmieder, Johannes F. & Wachter, Till von & Heining, Jörg, 2022. "The Costs of Job Displacement over the Business Cycle and Its Sources: Evidence from Germany," IAB-Discussion Paper 202220, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:202220
    DOI: 10.48720/IAB.DP.2220
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    Keywords

    Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Auswirkungen ; berufliche Reintegration ; Dequalifizierung ; Einkommenseffekte ; Entlassungen ; Konjunkturabhängigkeit ; Lohnentwicklung ; Massenentlassungen ; Rezession ; Arbeitslose ; 1975-2009;
    All these keywords.

    JEL classification:

    • 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
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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