The Unequal Cost of Job Loss Across Countries

52 Pages Posted: 19 May 2022 Last revised: 5 May 2023

See all articles by Antoine Bertheau

Antoine Bertheau

University of Copenhagen

Edoardo Maria Acabbi

Universidad Carlos III de Madrid

Cristina Barcelo

Banco de España

Andreas Gulyas

University of Mannheim

Stefano Lombardi

Government of the Republic of Finland - VATT Institute for Economic Research

Raffaele Saggio

University of British Columbia (UBC)

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Abstract

We document the consequences of losing a job across countries using a harmonized research design. Workers in Denmark and Sweden experience the lowest earnings declines following job displacement, while workers in Italy, Spain, and Portugal experience losses three times as high. French and Austrian workers face earnings losses somewhere in-between. Key to these differences is that Southern European workers are less likely to find employment following displacement. Loss of employer-specific wage premiums accounts for 40% to 95% of within-country wage declines. The use of active labor market policies predicts a significant portion of the cross-country heterogeneity in earnings losses.

Keywords: labor market institutions, layoffs, labor turnover, wage dynamics, job loss costs, cross-country matched employer–employee dataset

JEL Classification: J30, J63, J64

Suggested Citation

Bertheau, Antoine and Acabbi, Edoardo Maria and Barcelo, Cristina and Gulyas, Andreas and Lombardi, Stefano and Saggio, Raffaele, The Unequal Cost of Job Loss Across Countries. IZA Discussion Paper No. 15033, Available at SSRN: https://ssrn.com/abstract=4114564 or http://dx.doi.org/10.2139/ssrn.4114564

Antoine Bertheau (Contact Author)

University of Copenhagen ( email )

Nørregade 10
Copenhagen, DK-1165
Denmark

Edoardo Maria Acabbi

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
Spain

HOME PAGE: http://eacabbi.github.io

Cristina Barcelo

Banco de España ( email )

Servicio de Estudios
Alcala, 48
Madrid, Madrid 28014
Spain
+34 91338 5887 (Phone)
+34 91 338 5678 (Fax)

Andreas Gulyas

University of Mannheim ( email )

Universitaetsbibliothek Mannheim
Zeitschriftenabteilung
Mannheim, 68131
Germany

Stefano Lombardi

Government of the Republic of Finland - VATT Institute for Economic Research

Raffaele Saggio

University of British Columbia (UBC) ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada

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