The Firms Role In Displaced Workers Earnings Losses PDF Download

"What is the magnitude of earnings losses that Canadian workers suffer several years after being displaced? The answer to this question is currently unknown. Several of the previous studies are based on U.S. data and have shown that, even five years after displacement, displaced workers still suffer substantial earnings losses. However, most of the evidence offered is based either on a sub-sample of high-tenure workers in a specific region or on relatively small samples drawn from the Panel Study of Income Dynamics. Furthermore, the evidence presented is not recent since it covers either the early to mid-1980s or the early 1990s. Canadian studies of worker displacement have compared pre-displacement wages to wages observed shortly after displacement but have been unable to quantify the magnitude of the earnings losses suffered several years after displacement. The goal of this paper is to fill this gap and to quantify the earnings losses experienced up to five years after displacement by Canadian workers who lost their job during the late 1980s and the 1990s as a result of firm closures or mass layoffs. To do so, we take advantage of Statistics Canada's Longitudinal Worker File, a unique administrative data set that tracks a large (10%) sample of Canadian workers throughout the 1983 to 2002 period."--Unedited text from document.