IDEAS home Printed from https://ideas.repec.org/p/pst/wpaper/323.html
   My bibliography  Save this paper

Job Displacement, Inter-Regional Mobility and Long-Term Earnings

Author

Listed:
  • Petri Böckerman

    (Palkansaajien tutkimuslaitos)

  • Tuomas Kosonen

    (Palkansaajien tutkimuslaitos)

  • Terhi Maczulskij

Abstract

We examine the effect of job displacement on regional mobility using linked employer-employee panel data for the 1995-2014 period. We also study whether displaced movers obtain earnings and employment gains compared to displaced stayers. The results show that job displacement increases the migration probability by ~70%. However, social capital in a region and housing characteristics decrease the propensity to move, indicating that people do not make the migration decisions solely based on short-term economic incentives. Migration has an immediate negative relationship with earnings, but the link diminishes as time passes and eventually turns positive for men. The link between migration and employment is nevertheless positive and persistent for both genders.

Suggested Citation

  • Petri Böckerman & Tuomas Kosonen & Terhi Maczulskij, 2018. "Job Displacement, Inter-Regional Mobility and Long-Term Earnings," Working Papers 323, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    • Handle: RePEc:pst:wpaper:323
    as

    Download full text from publisher

    File URL: https://labour.fi/wp-content/uploads/2020/02/Tyopaperi323.pdf
    File Function: First version, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2018. "Job Loss and Immigrant Labour Market Performance," Economica, London School of Economics and Political Science, vol. 85(337), pages 124-151, January.
    2. Raj Chetty & Nathaniel Hendren, 2018. "The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(3), pages 1163-1228.
    3. Anabela Carneiro & Pedro Portugal, 2008. "Wages and the Risk of Displacement," Research in Labor Economics, in: Work, Earnings and Other Aspects of the Employment Relation, pages 251-276, Emerald Group Publishing Limited.
    4. John M. Abowd & Kevin L. McKinney & Lars Vilhuber, 2009. "The Link between Human Capital, Mass Layoffs, and Firm Deaths," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 447-472, National Bureau of Economic Research, Inc.
    5. J. Meekes & W.H.J. Hassink, 2016. "The role of the housing market in workers’ resilience to job displacement after firm bankruptcy," Working Papers 16-10, Utrecht School of Economics.
    6. Oikarinen, Elias, 2012. "Empirical evidence on the reaction speeds of housing prices and sales to demand shocks," Journal of Housing Economics, Elsevier, vol. 21(1), pages 41-54.
    7. Kristiina Huttunen & Jarle Møen & Kjell G. Salvanes, 2018. "Job Loss and Regional Mobility," Journal of Labor Economics, University of Chicago Press, vol. 36(2), pages 479-509.
    8. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    9. Raj Chetty & Nathaniel Hendren, 2018. "The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(3), pages 1107-1162.
    10. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 17(Nov), pages 2-20.
    11. repec:bla:scandj:v:104:y:2002:i:4:p:621-39 is not listed on IDEAS
    12. 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.
    13. Satu Nivalainen, 2004. "Determinants of family migration: short moves vs. long moves," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(1), pages 157-175, February.
    14. Inés Hardoy & Pål Schøne, 2014. "Does the impact of plant closure on labour market attachment differ between immigrants and native workers across the business cycle?," Empirical Economics, Springer, vol. 46(1), pages 229-252, February.
    15. Sari Pekkala & Hannu Tervo, 2002. "Unemployment and Migration: Does Moving Help?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 621-639, December.
    16. Anders Boman, 2011. "Does migration pay? Earnings effects of geographic mobility following job displacement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1369-1384, October.
    17. Pissarides, Christopher A & McMaster, Ian, 1990. "Regional Migration, Wages and Unemployment: Empirical Evidence and Implications for Policy," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 812-831, October.
    18. Allen Head & Huw Lloyd-Ellis, 2012. "Housing Liquidity, Mobility, and the Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(4), pages 1559-1589.
    19. René Böheim & Mark P. Taylor, 2002. "Tied Down Or Room To Move? Investigating The Relationships Between Housing Tenure, Employment Status And Residential Mobility In Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(4), pages 369-392, September.
    20. Schwerdt, Guido, 2011. "Labor turnover before plant closure: "Leaving the sinking ship" vs. "Captain throwing ballast overboard"," Labour Economics, Elsevier, vol. 18(1), pages 93-101, January.
    21. Luigi Cannari & Francesco Nucci & Paolo Sestito, 2000. "Geographic labour mobility and the cost of housing: evidence from Italy," Applied Economics, Taylor & Francis Journals, vol. 32(14), pages 1899-1906.
    22. Jaakko Pehkonen, 2000. "Employment, unemployment and output growth in booms and recessions: time series evidence from Finland, 1970-1996," Applied Economics, Taylor & Francis Journals, vol. 32(7), pages 885-900.
    23. Daniel Fackler & Lisa Rippe, 2016. "Losing Work, Moving away? Regional Mobility after Job Loss," SOEPpapers on Multidisciplinary Panel Data Research 861, DIW Berlin, The German Socio-Economic Panel (SOEP).
    24. Meekes, Jordy & Hassink, Wolter H.J., 2019. "The role of the housing market in workers′ resilience to job displacement after firm bankruptcy," Journal of Urban Economics, Elsevier, vol. 109(C), pages 41-65.
    25. repec:bla:scotjp:v:49:y:2002:i:4:p:369-92 is not listed on IDEAS
    26. Satu Nivalainen, 2005. "Interregional migration and post-move employment in two-earner families: Evidence from Finland," Regional Studies, Taylor & Francis Journals, vol. 39(7), pages 891-907.
    27. Meekes, Jordy & Hassink, Wolter, 2017. "The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy," IZA Discussion Papers 10894, Institute of Labor Economics (IZA).
    28. Timothy Dunne & J. Bradford Jensen & Mark J. Roberts, 2009. "Producer Dynamics: New Evidence from Micro Data," NBER Books, National Bureau of Economic Research, Inc, number dunn05-1.
    29. Fackler, Daniel & Rippe, Lisa, 2016. "Losing work, moving away? Regional mobility after job loss," IWH Discussion Papers 26/2016, Halle Institute for Economic Research (IWH).
    30. Michael Podgursky & Paul Swaim, 1987. "Job Displacement and Earnings Loss: Evidence from the Displaced Worker Survey," ILR Review, Cornell University, ILR School, vol. 41(1), pages 17-29, October.
    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. Mr. Tigran Poghosyan, 2018. "Regional Labor Mobility in Finland," IMF Working Papers 2018/252, International Monetary Fund.
    2. Hyungjo Hur & Keumseok Koh, 2023. "Why and Where Do Highly Educated Workers Relocate? A National-Level Analysis across U.S. Census Regions," Sustainability, MDPI, vol. 15(2), pages 1-23, January.
    3. Maria Vaalavuo & Mikko-Waltteri Sihvola, 2021. "Are the Sick Left Behind at the Peripheries? Health Selection in Migration to Growing Urban Centres in Finland," European Journal of Population, Springer;European Association for Population Studies, vol. 37(2), pages 341-366, April.

    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. Maczulskij, Terhi & Böckerman, Petri, 2019. "Losing a Job and (Dis)incentives to Move," ETLA Working Papers 75, The Research Institute of the Finnish Economy.
    2. J. Meekes & W.H.J. Hassink, 2016. "The role of the housing market in workers’ resilience to job displacement after firm bankruptcy," Working Papers 16-10, Utrecht School of Economics.
    3. Hyungjo Hur & Keumseok Koh, 2023. "Why and Where Do Highly Educated Workers Relocate? A National-Level Analysis across U.S. Census Regions," Sustainability, MDPI, vol. 15(2), pages 1-23, January.
    4. Daniel Fackler & Lisa Rippe, 2016. "Losing Work, Moving away? Regional Mobility after Job Loss," SOEPpapers on Multidisciplinary Panel Data Research 861, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Meekes, Jordy & Hassink, Wolter H.J., 2019. "The role of the housing market in workers′ resilience to job displacement after firm bankruptcy," Journal of Urban Economics, Elsevier, vol. 109(C), pages 41-65.
    6. Meekes, Jordy & Hassink, Wolter, 2017. "The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy," IZA Discussion Papers 10894, Institute of Labor Economics (IZA).
    7. Fackler, Daniel & Rippe, Lisa, 2016. "Losing work, moving away? Regional mobility after job loss," IWH Discussion Papers 26/2016, Halle Institute for Economic Research (IWH).
    8. Orsa Kekezi & Ron Boschma, 2021. "Returns to migration after job loss—The importance of job match," Environment and Planning A, , vol. 53(6), pages 1565-1587, September.
    9. Jordy Meekes & Wolter H. J. Hassink, 2023. "Endogenous local labour markets, regional aggregation and agglomeration economies," Regional Studies, Taylor & Francis Journals, vol. 57(1), pages 13-25, January.
    10. Paul Bingley & Lorenzo Cappellari & Marco Ovidi, 2023. "When it hurts the most: timing of parental job loss and a child’s education," LISER Working Paper Series 2023-12, Luxembourg Institute of Socio-Economic Research (LISER).
    11. Meekes, Jordy & Hassink, Wolter, 2020. "Fired and Pregnant: Gender Differences in Job Flexibility Outcomes after Job Loss," IZA Discussion Papers 13779, Institute of Labor Economics (IZA).
    12. Schwerdt, Guido, 2011. "Labor turnover before plant closure: "Leaving the sinking ship" vs. "Captain throwing ballast overboard"," Labour Economics, Elsevier, vol. 18(1), pages 93-101, January.
    13. Meekes, Jordy & Hassink, Wolter H.J., 2022. "Gender differences in job flexibility: Commutes and working hours after job loss," Journal of Urban Economics, Elsevier, vol. 129(C).
    14. Kristiina Huttunen & Jarle Møen & Kjell G. Salvanes, 2018. "Job Loss and Regional Mobility," Journal of Labor Economics, University of Chicago Press, vol. 36(2), pages 479-509.
    15. Eric A. Hanushek & Guido Schwerdt & Ludger Woessmann & Lei Zhang, 2017. "General Education, Vocational Education, and Labor-Market Outcomes over the Lifecycle," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 48-87.
    16. Dickens William T. & Triest Robert K., 2012. "Potential Effects of the Great Recession on the U.S. Labor Market," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(3), pages 1-41, October.
    17. Dahlberg, Matz & Martén, Linna & Öckert, Björn, 2021. "Who recovers from a job loss? The importance of cognitive and non-cognitive skills," Working Paper Series 2021:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    18. Kangoh Lee, 2018. "Fixed‐Rate Mortgages, Labor Markets, and Efficiency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(5), pages 1033-1072, August.
    19. Daniel Fackler & Lisa Rippe, 2017. "Losing Work, Moving Away? Regional Mobility After Job Loss," LABOUR, CEIS, vol. 31(4), pages 457-479, December.
    20. Gianni De Fraja & Sara Lemos & James Rockey, 2021. "The Wounds That Do Not Heal: The Lifetime Scar of Youth Unemployment," Economica, London School of Economics and Political Science, vol. 88(352), pages 896-941, October.

    More about this item

    Keywords

    Unemployment; Job Displacement; Migration; Earnings; Employment;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

    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:pst:wpaper:323. 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: Jaana Toivainen (email available below). General contact details of provider: https://edirc.repec.org/data/laborfi.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.