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Plant Closings and the Labor Market Outcomes of Displaced Workers: Evidence from Mexico

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dc.contributor.authorArias, Francisco
dc.contributor.authorLederman, Daniel
dc.date.accessioned2023-08-08T16:57:43Z
dc.date.available2023-08-08T16:57:43Z
dc.date.issued2023-08-08
dc.description.abstractThis paper investigates the impacts of job displacement on subsequent labor market outcomes, focusing on differentiated effects by educational groups and gender. The findings show that job separations caused by plant closings result in sizable and long-lasting wage reductions, with an average decline of −7.5 percent over a nine-year period relative to workers who did not experience job losses. A stronger effect is estimated for highly educated workers than for low educated workers, with initial effects being 18.4 and 9 percent wage drops, respectively. For working hours, the effect on low educated workers is double the effect on highly educated workers, with 3.0 and 1.5 additional hours per week, respectively. Using the rotating panel of the survey, difference in differences coefficients are estimated, removing time-invariant individual heterogeneity. Compared to ordinary least squares, the difference in differences estimates reduce the magnitude of the average impacts of plant closing on wages, from −7.5 to −4.7 percent, and on working hours from 1.4 to 0.53 additional hours. These results suggest that the ordinary least squares estimates are upwardly biased due to omitted individual worker heterogeneity. The paper discusses another potential remaining source of endogeneity concerning the quality of the match between employers and workers.en
dc.identifierhttp://documents.worldbank.org/curated/en/099226408032390595/IDU0e06fdef30c64304e2d0a1f702d1d1df97c78
dc.identifier.doi10.1596/1813-9450-10536
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/40158
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Papers; 10536
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectLABOR MARKET
dc.subjectJOB DISPLACEMENT
dc.subjectWAGES
dc.subjectEDUCATION AND EMPLOYMENT
dc.subjectDIFFERENCE IN DIFFERENCE
dc.subjectGENDER AND EMPLOYMENT
dc.subjectJOB LOSS IMPACT BY EDUCATION
dc.titlePlant Closings and the Labor Market Outcomes of Displaced Workersen
dc.title.subtitleEvidence from Mexicoen
dc.typeWorking Paper
dspace.entity.typePublication
okr.associatedcontenthttps://reproducibility.worldbank.org/index.php/catalog/126 Link to data and reproducibility package
okr.crossref.titlePlant Closings and the Labor Market Outcomes of Displaced Workers: Evidence from Mexico
okr.date.disclosure2023-08-03
okr.date.lastmodified2023-08-03T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099226408032390595/IDU0e06fdef30c64304e2d0a1f702d1d1df97c78
okr.guid099226408032390595
okr.identifier.docmidIDU-e06fdef3-c643-4e2d-a1f7-2d1d1df97c78
okr.identifier.doi10.1596/1813-9450-10536
okr.identifier.doihttp://dx.doi.org/10.1596/1813-9450-10536
okr.identifier.externaldocumentum34129678
okr.identifier.internaldocumentum34129678
okr.identifier.reportWPS10536
okr.import.id1411
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099226408032390595/pdf/IDU0e06fdef30c64304e2d0a1f702d1d1df97c78.pdfen
okr.region.countryMexico
okr.topicSocial Protections and Labor::Employment and Unemployment
okr.topicPoverty Reduction::Employment and Shared Growth
okr.topicSocial Protections and Labor::Wages, Compensation & Benefits
okr.topicEducation::Education and Society
okr.topicGender::Gender and Economic Policy
okr.unitOffice of the Chief Economist (MNACE)
relation.isAuthorOfPublication2c812f70-403a-5905-88e4-bd90a5f31e96
relation.isAuthorOfPublication.latestForDiscovery2c812f70-403a-5905-88e4-bd90a5f31e96
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