Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114085
Authors: 
Raposo, Pedro
Portugal, Pedro
Carneiro, Anabela
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9220
Abstract: 
Using an unusually rich matched employer-employee-job title data set for Portugal, this paper evaluates the sources of wage losses of workers displaced due to firm closure based on the comparison of workers' wages differentials before and after displacement. Potential wage losses of displaced workers can be related to firm, job title, and match heterogeneity in the pre- and post-displacement jobs. In this vein, we estimate a three-way high-dimensional fixed effects regression model that enables us to decompose the sources of the wage losses into the contribution of firm, job title, and match fixed effects. The worker-firm match plays a very sizable role. We found that the allocation of workers into poorer matches accounts for 38 percent of the total average wage loss. Sorting among firms accounts for 36 percent. Job downgrading also plays a significant role in explaining the wage loss of displaced workers, accounting for the remaining 26 percent.
Subjects: 
match effects
job title
high-dimensional fixed effects
displaced
wage losses
JEL: 
J31
J63
J65
E24
Document Type: 
Working Paper

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