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Seminarios académicos y conferencias

Matías Tapia, Banco Central de Chile

“Sudden Firm Closures and the effects on Displaced Workers”

3 Octubre 2018 - 15:30 hrs.

Sala de postgrados, Facultad de Ciencias Económicas y Administrativas UC

Abstract: Using administrative tax records for Chile, we estimate the wage and employment costs of job displacement. Similarly to previous literature, our identification strategy uses displacement events associated to massive layoffs. However, we refine this identification strategy by focusing on sudden firm closures. In those episodes, employment in a given firm was not decreasing prior to its closure. We show that estimated effects of displacement under this definition are significantly larger than the ones found using the traditional identification strategy. This is consistent with the idea that these layoffs might be unexpected, and thus workers were unable to prepare for the event- for example, by doing on the job search or through buffer stock saving.  The paper also characterize the dynamics of firm closures, and how they relate to changes in the composition of workers within the firm.