In the Right Place at the Wrong Time : The Role of Firms and Luck in Young Workers? Careers

We exploit administrative data on young German workers and their employers to study the long-term effects of an early job loss. To account for non-random sorting of workers into firms with different turnover rates and for selective job mobility, we use changes over time in firm- and age-specific labor demand as an instrument for displacement. We find that wage losses of young job losers are initially 15% but fade to zero within five years. Only workers leaving very large establishments suffer persistent losses. A comparison of estimators implies that initial sorting, negative selection, and voluntary job mobility may have biased previous U.S. studies finding permanent effects of early displacements.

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Year of publication:	2004
Authors:	von Wachter, Till ; Bender, Stefan
Publisher:	Bonn : Institute for the Study of Labor (IZA)
Subject:	Jugendliche Arbeitskräfte \| Erwerbsverlauf \| Arbeitsmobilität \| Arbeitslosigkeit \| Einkommen \| Adverse Selection \| Arbeitsuche \| Schätzung \| Deutschland \| job displacement \| job search \| initial assigment \| adverse selection

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Series:	IZA Discussion Papers ; 1348
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	474414280 [GVK] hdl:10419/20618 [Handle]
Classification:	J65 - Unemployment Insurance; Severance Pay; Plant Closings ; J63 - Turnover; Vacancies; Layoffs
Source:	EconStor