Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/195041
Authors: 
Huynh, Kim P.
Ostrovsky, Yuri
Petrunia, Robert J.
Voia, Marcel C.
Year of Publication: 
2017
Citation: 
[Journal:] IZA Journal of Labor Economics [ISSN:] 2193-8997 [Volume:] 6 [Year:] 2017 [Issue:] 7 [Pages:] 1-31
Abstract: 
Firm shutdown creates a turbulent situation for workers as it leads directly to layoffs for its workers. An additional consideration is whether a firm's shutdown within an industry creates turbulence for workers at other continuing firms. Using data drawn from the Longitudinal Worker File, a Canadian firm-worker matched employment database, we investigate the impact of industry shutdown rates on workers at continuing firm. This paper exploits variation in shutdown rates across industries and within an industry over time to explain the rate of permanent layoffs and the growth of workers' earnings. We find an increase in industry shutdown rates increases the probability of permanent layoffs and decreases earnings growth for workers at continuing firms.
Subjects: 
Worker separation
Firm survival
Selection
JEL: 
J24
J31
J63
C35
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article
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