Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20618
Authors: 
von Wachter, Till
Bender, Stefan
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion paper series 1348
Abstract: 
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.
Subjects: 
job displacement
job search
initial assigment
adverse selection
JEL: 
J65
J63
Document Type: 
Working Paper

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