Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311138 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2974
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We analyze how corporate reorganization and liquidation change labor reallocation during bankruptcy using randomized judge assignments and linked Portuguese employer-employee and firm data. Reorganization reduces the negative effect of bankruptcy on employee earnings, even with most workers leaving reorganized firms. We examine plausible mechanisms and find evidence that the retention of general skills and improved job-match quality contribute meaningfully to this effect. The average cost of labor misallocation caused by reorganization is small. However, for some workers in the least productive filers, this cost can be large, outweighing the effect on earnings.
Subjects: 
corporate reorganization
bankruptcy
JEL: 
G33
G38
J24
J63
K39
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6819-5
Document Type: 
Working Paper

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