Regional Structural Change and the Effects of Job Loss

58 Pages Posted: 24 May 2022

See all articles by Melanie Arntz

Melanie Arntz

ZEW – Leibniz Centre for European Economic Research

Boris Ivanov

ZEW – Leibniz Centre for European Economic Research

Laura Pohlan

ZEW – Leibniz Centre for European Economic Research; Institute for Employment Research (IAB)

Abstract

Routine-intensive occupations have been declining in many countries, but how does this affect individual workers’ careers if this decline is particularly severe in their local labor market? This paper uses administrative data from Germany and a matched difference-in-differences approach to show that the individual costs of job loss strongly depend on the task-bias of regional structural change. Workers displaced from routine manual occupations have substantially higher and more persistent employment and wage losses in regions where such occupations decline the most. Regional and occupational mobility partly serve as an adjustment mechanism, but come at high cost as these switches also involve losses in firm wage premia. Non-displaced workers, by contrast, remain largely unaffected by structural change.

Keywords: routine-biased structural change, local labor markets, displacement, mass-layoffs, plant closures, matching, difference-in-differences, event study

JEL Classification: J24, J63, J64, J65, O33, R11

Suggested Citation

Arntz, Melanie and Ivanov, Boris and Pohlan, Laura and Pohlan, Laura, Regional Structural Change and the Effects of Job Loss. IZA Discussion Paper No. 15313, Available at SSRN: https://ssrn.com/abstract=4118214 or http://dx.doi.org/10.2139/ssrn.4118214

Melanie Arntz (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Boris Ivanov

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Laura Pohlan

ZEW – Leibniz Centre for European Economic Research ( email )

L 7,1
Mannheim, 68161
Germany

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

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