Destruction and Reallocation of Skills Following Large Company Closures
21 Pages Posted: 29 May 2020
Date Written: March 2017
This paper analyzes what happens to redundant skills and workers when large companies close down and whether their skills are destroyed or reallocated. The analysis is based on a combination of qualitative and quantitative data of the closure of four companies. Getting a job in a skill‐related industry or moving to a spinoff firm leads to skill reallocation. Thus, the result depends on regional idiosyncrasies such as industry structure and urbanization. If local policy makers and the owners exert a coordinated effort, it is possible to create success stories of less skill destruction in urban as well as peripheral regions.
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