Understanding the reallocation of displaced workers to firms

Paul Brandily, Camille Hémet, Clément Malgouyres

We study job displacement in France. In the medium run, losses in firm-specific wage premium account for a substantial share of the overall cost of displacement. However, and despite the positive correlation between premium and productivity in the cross-section of firms, we find that workers are reemployed by high productivity, low labor share firms. The observed reallocation is therefore productivity-enhancing, yet costly for workers. We show that destination firms are less likely to conclude collective wage agreements and have lower participation rates at professional elections. Overall, our results point to a loss in bargaining power.

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Year of publication:	February 2022
Authors:	Brandily, Paul ; Hémet, Camille ; Malgouyres, Clément
Publisher:	Bonn, Germany : IZA - Institute of Labor Economics
Subject:	displaced workers \| wage \| reallocation \| productivity \| labor share \| Lohn \| Wages \| Kündigung \| Dismissal \| Arbeitsmobilität \| Labour mobility \| Lohnquote \| Labor share \| Arbeitsproduktivität \| Labour productivity \| Arbeitslosigkeit \| Unemployment \| Allokation \| Allocation \| Schätzung \| Estimation \| Produktivität \| Productivity