Download this Paper Open PDF in Browser

A Distributional Analysis of Displacement Costs in an Economic Depression and Recovery

VATT Disscussion Paper No. 465

32 Pages Posted: 6 Aug 2009  

Ossi Korkeamäki

Government Institute for Economic Research (VATT)

Tomi Kyyrä

VATT Institute for Economic Research

Date Written: August 6, 2009

Abstract

We study the earnings losses of Finnish private sector workers who lost their jobs at two very different points in the business cycle. The first group was displaced in 1992 (depression period) and the second one in 1997 (recovery period). The focal point of the analysis is the quantile displacement effect, the change in the earnings distribution due to involuntary job separation. We use mass layoffs and plant closures to identify groups of workers who were displaced from exogenous causes. The effect of displacement is strongest at the lower end of the earnings distribution, and small or negligible at the upper end. Women and those displaced during the depression period are subject to larger earnings losses.

Keywords: Displacement, earnings losses, unemployment, quantile regression

JEL Classification: J31, J63, J65

Suggested Citation

Korkeamäki, Ossi and Kyyrä, Tomi, A Distributional Analysis of Displacement Costs in an Economic Depression and Recovery (August 6, 2009). VATT Disscussion Paper No. 465. Available at SSRN: https://ssrn.com/abstract=1444717 or http://dx.doi.org/10.2139/ssrn.1444717

Ossi Korkeamäki

Government Institute for Economic Research (VATT) ( email )

Arkadiankatu 7
Helsinki, 00101
Finland

Tomi Kyyrä (Contact Author)

VATT Institute for Economic Research ( email )

Arkadiankatu 7
Helsinki, 00101
Finland
+3583045542 (Phone)

HOME PAGE: http://www.vatt.fi

Paper statistics

Downloads
32
Abstract Views
306