Labor Turnover before Plant Closure: ‘Leaving the sinking ship’ vs. ‘Captain throwing ballast overboard’

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dc.contributor.author SCHWERDT, Guido
dc.date.accessioned 2007-10-13T13:32:15Z
dc.date.available 2007-10-13T13:32:15Z
dc.date.issued 2007
dc.identifier.issn 1725-6704
dc.identifier.uri http://hdl.handle.net/1814/7156
dc.description.abstract Involuntary job loss in administrative data is commonly identified by focusing on mass-layoffs or plant closures. However, such events usually do not happen without prior knowledge, which potentially leads to selection in the labor turnover of distressed firms. We find that workers separating from closing plants up to 2 quarters before closure are associated with significantly lower displacement costs and on average significantly higher pre-closure earnings levels as opposed to ultimately displaced workers. Furthermore, our results indicate that displaced workers with high pre-closure earnings experience significantly lower reductions in future employment probabilities. These findings suggest that compositional differences cause estimated displacement costs to differ between early leavers and ultimately displaced workers. Focusing exclusively on the latter group would lead to an overestimation of displacement costs. en
dc.language.iso en en
dc.publisher European University Institute
dc.relation.ispartofseries EUI ECO en
dc.relation.ispartofseries 2007/22 en
dc.subject J63 en
dc.subject J65 en
dc.subject C21 en
dc.subject C23 en
dc.subject plant closure en
dc.subject labor turnover en
dc.subject exact-matching en
dc.subject employer-employee data en
dc.title Labor Turnover before Plant Closure: ‘Leaving the sinking ship’ vs. ‘Captain throwing ballast overboard’ en
dc.type Working Paper en
dc.neeo.contributor SCHWERDT|Guido|aut|
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