Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246037 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 2021:2
Publisher: 
Institute for Evaluation of Labour Market and Education Policy (IFAU), Uppsala
Abstract: 
A well-functioning labor market is characterized by job reallocations, but the individual costs can be vast. We examine if individual's ability to cope with such adjustments depends on their cognitive and non-cognitive skills (measured by population-wide enlistment tests). Since selection into unemployment is a function of skills, we address the endogeneity of a job loss by exploiting the exogenous labor market shock provided by the military base closures in Sweden following the end of the Cold War. We find that labor earnings decrease and unemployment and social insurance benefits increase for displaced workers. In particular, individuals with high cognitive and, especially, non-cognitive skills face shorter unemployment spells than the individuals with low skills.
Subjects: 
Cognitive and Non-cognitive skills
Displaced workers
Unemployment
Plant closure
Defense draw down
JEL: 
J63
J65
H56
Document Type: 
Working Paper

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