Working Paper: CEPR ID: DP17071
Authors: Paul Brandily; Camille Hmet; Clément Malgouyres
Abstract: We study job displacement in France. In the medium run, losses in firmspecific wage premium account for a substantial share of the overall cost of displacement. However, and despite the positive correlation between premium and productivity in the cross-section of firms, we find that workers are reemployed by high productivity, low labor share firms. The observed reallocation is therefore productivity-enhancing, yet costly for workers. We show that destination firms are less likely to conclude collective wage agreements and have lower participation rates at professional elections. Overall, our results point to a loss in bargaining power.
Keywords: displaced workers; wage; reallocation; productivity; labor share
JEL Codes: J63; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reemployment at More Productive Firms (J68) | Lower Wages (J31) |
| Job Displacement (J63) | Bargaining Power Decline (L14) |
| Bargaining Power Decline (L14) | Less Likely to Engage in Collective Wage Agreements (J59) |
| Bargaining Power Decline (L14) | Lower Turnout in Professional Elections (J44) |
| Job Displacement (J63) | Productivity Enhancement (O49) |
| Job Displacement (J63) | Earnings Loss (J31) |
| Job Displacement (J63) | Loss of Firm-Specific Wage Premiums (J39) |