Job Ladders and Earnings of Displaced Workers
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AbstractWorkers who suffer job displacement experience surprisingly large and persistent earnings losses. This paper proposes an explanation for this robust empirical puzzle in a model of search with a significant job ladder and increased separation rates for the recently hired. In addition to capturing the depth and persistence of displaced worker earnings losses, the model matches: employment-to-nonemployment and employer-to-employer probabilities by tenure; the empirical decomposition of earnings losses into reduced wages and employment; observed wage dispersion; and the distribution of wage changes around a nonemployment event.
CitationKrolikowski, Pawel. 2017. "Job Ladders and Earnings of Displaced Workers." American Economic Journal: Macroeconomics, 9 (2): 1-31. DOI: 10.1257/mac.20140064
- J31 Wage Level and Structure; Wage Differentials
- J63 Labor Turnover; Vacancies; Layoffs
- J64 Unemployment: Models, Duration, Incidence, and Job Search
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