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Title:Worker Displacement During the Transition : Experience from Slovenia PDF Logo
Authors:Orazem, Peter F.
Vodopivec, Milan
Wu, Ruth
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1297
Abstract:The transition to market in Slovenia created labor displacements that were on par or greater than that experienced in North America in the 1980s. A simple theoretical model suggests that factors which raise the probability of layoff should also increase the probability of a quit, predictions that are borne out in data. Probability of both layoffs and quits fell with worker tenure, firm profitability and expected severance costs. Individuals facing a higher probability of displacement accepted slower wage growth than otherwise comparable workers. The incentives to avoid displacement were strong – workers that actually were displaced faced a slow process of transiting out of unemployment with only one-third finding reemployment. Correcting for selection, real wage losses for displaced workers are comparable to those reported for displaced workers in North America.
Subjects:displacement
subsidies
wages
reemployment
Slovenia
selection
specific human capital
JEL:P2
J63
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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