Worker Displacement in France

Also presented at the annual meeting of the Society of Labor Economists, May 1999, Cambridge, Massachusetts, USA, at the ZEW Conference Unemployment in Europe, October 1998, Mannheim, Germany, at the 15èmes Journées de Microéconomie Appliquée, June 1998, Pointe-à-Pitre, Guadeloupe, France, and at the Bureau of the Census conference International Symposium on Linked Employer-Employee Data, May 1998, Washington DC, USA.Invited presentation at the Norwegian Labor Workshop, May 1999, Cambridge, Massachusetts, USA.In this paper, we consider the impact of displacement (defined as separation from a stable job due to firm closure) on workers in France. We find that a large share of displaced workers find new jobs without experiencing any interruption in their employment histories, and that falling into nonemployment seems to be a more transitory phenomenon for displaced workers than other separators. We find that the estimated effects of deplacement on earnings in France is very sensitive to the measure of earnings used, as there seems to be a lot of part-year working that takes place in the years surrounding a displacement or other separation. Earnings changes for displaced workers in France seem to reflect a major difference between those who find new jobs quickly and those who do not. There is an annual earnings penalty of an additional 28 percent (relative to continuously employed workers) for those men who do not find new jobs in the year following their displacement and this penalty is 47 percent for displaced women. owever, this annual earnings penalty seems driven largely by people working fewer days per year, as the slow job finding penalty on average daily earnings is only 4 percent for displaced men and 20 percent for displaced women