Earnings Loss of Displaced Workers” Jacobson et al. 1993) is one of the most influential early studies. This shift followed a relative increase in the wages of highly skilled workers over the same period. Another explanation for the lower chances of older workers in the labor market is the cohort effect of education.
The claim that the use of social contacts in itself improves workers' re-employment opportunities has been challenged by Mouw. There is a debate in the literature as to whether older workers who take early retirement or leave the labor force are "pushed" or "pulled" out of the labor market.
Type and Quality of the Post-displacement Job .1 Reemployment Sectors and Occupations
Determinants of Post-displacement Wages
Much research has shown that displaced workers suffer from wage loss when re-employed (Couch and Placzek 2010). A study from the USA finds that each additional year of education reduces the wage loss of displaced workers by a third (Chan and Stevens 2001: 568). A Dutch study reports that workers with more than a secondary vocational education have lower wage losses than workers with a lower level of education (Kriechel and Pfann.
Similarly, a Finnish study provides evidence of a linear relationship between education and wage loss – with the lowest losses for workers with a tertiary education (Appelqvist 2007: 38). Fourth, research based on the US Displaced Worker Survey suggests that sector employment leads to unemployment wage losses. Changing occupations is therefore likely to result in higher wage losses than changing sectors while remaining in the pre-displacement occupation.
Conversely, a mechanic who worked in manufacturing and remains in the sector but is re-employed as a stock clerk is likely to experience a wage loss. Based on US data, Jacobson et al argue that the loss of fixed rents, such as union premiums, increases the loss of workers' wages. Pennsylvania even found a 20% wage loss compared to non-displaced workers 6 years after job loss.
Moreover, wage losses in the US appear to be most severe for workers with the lowest incomes prior to relocation (Feather 1997: 37).
Changes in Job Quality
A study based on the UK Labor Force Survey shows that unemployed workers are five to ten times more likely to be re-employed in temporary jobs than employed workers (Payne and Payne 1993: 528). Nevertheless, temporary employment is probably more beneficial than long-term unemployment and can in some cases act as a stepping stone to permanent employment (Gerfin et al. This expectation is often as important a source of anxiety as the actual event of job loss (Sverke) et al.
However, a Finnish study has shown a close relationship between the subjective perception of job insecurity and the level of unemployment at a given time (Nätti et al. 2005). The mismatch between individuals' skills and job requirements usually results in unsatisfactory work relationships. A small-scale study from the US finds that displaced workers suffer more often from skill mismatch than non-displaced workers (Leana and Feldman.
But empirical evidence shows that among workers who are overqualified in their first job, two-thirds are still working in a job for which they are overqualified 6 years later (Green and McIntosh 2007: 428). It expresses the hierarchical position of the workers and represents the autonomy they have in their work. A study based on longitudinal data from Wisconsin shows that compared to non-displaced workers, displaced workers experience a reduction in job authority as a consequence of being laid off (Brand 2006: 290).
Consistent with these results, a longitudinal study based on data from the ECHP for Denmark, Austria, Spain and the United Kingdom finds that formerly unemployed workers were more likely to experience lower authority at work in all countries, except Austria (Dieckhoff 2011: 242).
Sociability and Well-Being
Coping Strategies on the Household Level
This assumption has been confirmed by a Canadian study showing that workers who experience a loss of income reduce their spending on clothing much more than on food (Browning and Crossley. It therefore seems likely that households reduce spending on goods that are not are indispensable while continuing to spend as much on necessities as they did before job losses.
Sociability
It therefore seems likely that households are reducing spending on non-dispensable goods while continuing to spend as much on necessities as they did before job loss. studied the change in marital relationship after the husband became unemployed, Atkinson et al. However, the reasons for the adverse effect of job loss on marital relationships are less clear. A study based on longitudinal administrative data from Norway supports this argument, showing that families receiving social security benefits - and therefore on the lower income side - before one of the spouses becomes unemployed are more likely to experience marital dissolution than families without such advantages (Hansen 2005: 142).
Another argument put forward is that workers may be blamed by their spouse for the job loss. A study from the USA reveals that the incidence of divorce increases only for workers subject to individual layoffs, but not for those experiencing plant closures (Charles and Stephens. They explain this finding by indicating that spouses of individually laid off workers may blame their partner while spouses of workers who experienced plant closures understand that it was not their fault.
Evidence from Norway based on longitudinal administrative data shows that divorce is significantly more likely in couples where the husband experiences factory closure than where the husband is continuously employed, even when controlling for selection effects and potential effects of income losses (Rege. et al. The life cycle stage of a family can therefore determine how much hardship job loss causes (Moen 1980: 183) Families with a lower household income are likely to be more upset by job loss than those with higher incomes.
Evidence for this is provided by a panel study from the US which finds that children of single mothers are particularly vulnerable when their mothers lose their jobs (Brand and Simon Thomas 2014: 982).
Subjective Well-Being
A quasi-experimental study of lottery winners in Britain, simulating wage increases, finds strong positive effects of winning on employee well-being – even in the long run (Gardner and Oswald). Yet a recent meta-analysis reports that the majority of studies find only a weak correlation between employee well-being and their pay (Judge et al. 2010). For example, two studies, based on German longitudinal data, find only extremely small effects of wage losses on welfare (Winkelmann and Winkelmann Ferrer-i-Carbonell and Frijters 2004: 656).
The well-being of displaced workers can also be affected by changes in the quality of the workplace, which are common after losing a job (Dieckhoff Brand 2006: 290). At the same time, overtime work can have similar negative consequences for workers' well-being, as shown by a study based on the British Household Panel Survey (Rose. Most importantly, the literature emphasizes that social relationships are important for individuals. 'well-being.
A British study comparing the effect of a large number of life domains on the well-being of individuals finds the strongest correlations between life satisfaction and social life satisfaction (Dolan et al. 2011: 7). Other studies claim that friendship is a better determinant of individual well-being than family and marital relationships. A study based on data from Canada and the US shows that relationships with friends are more than twice as strongly related to workers' well-being as relationships with their family (Helliwell and Putnam.
A qualitative longitudinal study conducted in New York state reports positive effects of job relocation on worker well-being (Sweet and Moen.
Our Model of Occupational Transition After Plant Closure and Hypotheses
To understand the impact of plant closures on workers' sociability and well-being, we examine workers' household coping strategies, changes in their social relationships, and changes in life satisfaction. We hypothesize that not only is there a causal relationship between plant closures and outcome measures, but that some of the outcome measures of interest are also causally related. Specifically, we expect that labor market status 2 years after displacement is related to the characteristics of the new jobs that displaced workers have taken or will take, their sociability, and well-being.
It is assumed that the characteristics of the new workplace also influence the sociability and well-being of the workers. Furthermore, we hypothesize that older workers have a harder time returning to the active labor force than younger workers. Referring to the theory of the transferability of specific knowledge and skills, we assume that re-employment is more difficult for older workers because they usually have longer employment and thus more company- and sector-specific skills.
In line with our hypothesis that older workers experience difficulties in finding a new job, we expect older workers to retire early to avoid long-term unemployment. We predict that workers with a wide range of firm-specific skills – particularly those with a high tenure, low-skilled workers and workers who change industries or occupations – will be most negatively impacted by wage losses. We assume that changes in employees' social relationships are most likely to cause changes in their well-being, even more so than changes in their financial situation.
So the closure of factories can leave long-lasting scars on workers' social lives, even after they return to work.
In addition, we predict that workers who change industries to avoid long-term unemployment are particularly likely to accept low-cost jobs in the service sector. The longer employees look for a job, the less likely they are to return to a job and the lower its quality. Such a scenario is particularly likely for older workers, as they often face strong barriers to returning to work after job loss.
Previous literature has shown that job loss is likely to cause persistent strain between spouses. Inequality and specialization: The growth of low-skilled service jobs in the United States (IZA Discussion Papers No. 4290). Labor market structure and reemployment rates: unemployment dynamics in West Germany and the United States.
Institutions and the structure of labor market matching in the United States and West Germany.
