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Research ArticleArticles

The Income Losses of Displaced Workers

Alexander Hijzen, Richard Upward and Peter W. Wright
Journal of Human Resources, January 2010, 45 (1) 243-269; DOI: https://doi.org/10.3368/jhr.45.1.243
Alexander Hijzen
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Richard Upward
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Peter W. Wright
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Abstract

We use a new, matched worker-firm dataset for the United Kingdom to estimate the income loss resulting from firm closure and mass layoffs. We track workers for up to nine years after the displacement event, and the availability of predisplacement characteristics allows us to implement difference-in-differences estimators using propensity score matching methods. Income losses during the first five years after the displacement event are in the range 18–35 percent per year for workers whose firm closes down, and 14–25 percent for workers who exit a firm which suffers a mass layoff. These losses are largely due to periods of nonemployment, which is consistent with previous work from Europe, but contrasts with that from the United States.

  • Received July 2007.
  • Accepted October 2008.
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Journal of Human Resources
Vol. 45, Issue 1
1 Jan 2010
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The Income Losses of Displaced Workers
Alexander Hijzen, Richard Upward, Peter W. Wright
Journal of Human Resources Jan 2010, 45 (1) 243-269; DOI: 10.3368/jhr.45.1.243

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The Income Losses of Displaced Workers
Alexander Hijzen, Richard Upward, Peter W. Wright
Journal of Human Resources Jan 2010, 45 (1) 243-269; DOI: 10.3368/jhr.45.1.243
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    • I. Introduction
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