Abstract
The labor market outcomes for displaced workers are generally negative post-dismissal. However, less is known about how these outcomes vary across the economic business cycle and the role played by labor mobility. Our research contributes to this literature by analyzing the employment trajectories of individuals laid off shortly before the two most recent and significant economic downturns, namely the Great Recession and the Covid-19 shock, in contrast to a period of economic stability. Leveraging an extensive dataset of employer-employee matches from the Italian private sector, we pinpoint individuals permanently separated from stable employment due to mass layoffs. Subsequently, we match the displaced workers with similar non-displaced workers on the basis of a two-step matching procedure in conjunction with a nonparametric adaptation of the difference-in-differences estimator, considering attributes at both firm and individual levels. Results show that laid off workers suffer very high losses in terms of wage earning and annual weeks worked, particularly during recessions. Additionally, our results affirm that labor mobility, encompassing both geographical and sectoral shifts, is the primary mechanism for adjustment in the labor market, a trend that becomes especially pronounced during the Covid-19 crisis.
Collegamento Microsoft Teams
Organizzazione
Cristina Bernini