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Journal Articles IZA Journal of Labor Economics Year : 2017

Industry shutdown rates and permanent layoffs: evidence from firm-worker matched data

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Kim Huynh
  • Function : Author
Yuri Ostrovsky
  • Function : Author
Robert Petrunia
  • Function : Author
Marcel Voia
  • Function : Author

Abstract

Abstract Firm shutdown creates a turbulent situation for workers as it leads directly to layoffs for its workers. An additional consideration is whether a firm’s shutdown within an industry creates turbulence for workers at other continuing firms. Using data drawn from the Longitudinal Worker File, a Canadian firm-worker matched employment database, we investigate the impact of industry shutdown rates on workers at continuing firm. This paper exploits variation in shutdown rates across industries and within an industry over time to explain the rate of permanent layoffs and the growth of workers’ earnings. We find an increase in industry shutdown rates increases the probability of permanent layoffs and decreases earnings growth for workers at continuing firms.

Dates and versions

hal-03573064 , version 1 (14-02-2022)

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Kim Huynh, Yuri Ostrovsky, Robert Petrunia, Marcel Voia. Industry shutdown rates and permanent layoffs: evidence from firm-worker matched data. IZA Journal of Labor Economics, 2017, 6 (1), pp.7. ⟨10.1186/s40172-017-0057-0⟩. ⟨hal-03573064⟩

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