Does the impact of plant closure on labour market attachment differ between immigrants and native workers across the business cycle?

This article investigates the effect of plant closure on the labour market attachment of immigrants and how these effects vary with business cycles. The research covers two periods: one of economic upturn and one of economic downturn, and uses a rich employer–employee dataset. Results show that experiencing a plant closure in a recession has more severe individual repercussions than experiencing a plant closure in an expanding economy, particularly for immigrants. In good times, the long-term effects of plant closure are very small for both immigrants and natives, while in a recession, effects are more severe for immigrants, possibly leading to lasting scars for this group. These results appear robust using both matching techniques and fixed-effect models. Copyright Springer-Verlag Berlin Heidelberg 2014