Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282885 
Year of Publication: 
2023
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2023-072/V
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We study changes in job security after displacement and exploit eligibility rules for lump-sum payments in the Netherlands to investigate the role of liquid wealth. Within five years of job loss, the likelihood of being a permanent worker remains 12% lower for displaced workers. Those eligible to a lump-sum transfer experience a significantly smaller negative shock to job security. This effect is driven by workers with low liquid wealth, pointing to liquidity constraints as an important mechanism linking unemployment and job security. Finally, we estimate that losses in job security can explain 21% of the wage cost associated with job displacement.
Subjects: 
Wealth inequality
Job loss
Job security
JEL: 
D31
E24
J65
Document Type: 
Working Paper

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