The Gender Gap in Earnings Losses after Job Displacement

53 Pages Posted: 20 Sep 2021 Last revised: 5 Jun 2022

See all articles by Hannah Illing

Hannah Illing

University of Bamberg

Johannes F. Schmieder

Boston University - Department of Economics; IZA; National Bureau of Economic Research (NBER)

Simon Trenkle

IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: September 2021

Abstract

Existing research has shown that job displacement leads to large and persistent earnings losses for men, but evidence for women is scarce. Using administrative data from Germany, we apply an event study design in combination with propensity score matching and a reweighting technique to directly compare men and women who are displaced from similar jobs and firms. Our results show that after a mass layoff, women’s earnings losses are about 35% higher than men’s, with the gap persisting five years after job displacement. This is partly explained by a higher propensity of women to take up part-time or marginal employment following job loss, but even full-time wage losses are almost 50% (or 5 percentage points) higher for women than for men. We then show that on the household level there is no evidence of an added worker effect, independent of the gender of the job loser. Finally, we document that parenthood magnifies the gender gap sharply: while fathers of young children have smaller earnings losses than men in general, mothers of young children have much larger earnings losses than other women.

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Suggested Citation

Illing, Hannah and Schmieder, Johannes F. and Trenkle, Simon, The Gender Gap in Earnings Losses after Job Displacement (September 2021). NBER Working Paper No. w29251, Available at SSRN: https://ssrn.com/abstract=3926932

Hannah Illing (Contact Author)

University of Bamberg

Kirschaeckerstrasse 39
Bamberg, 96045
Germany

Johannes F. Schmieder

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States

IZA ( email )

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Simon Trenkle

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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