Interindustry variation in the costs of job displacement

Abstract

Job displacement entails a substantial wage reduction for most dis- placed workers. We show that the mean reduction, the tenure profile of reductions, and the experience profile of reductions all vary sub- stantially across industries. We then link this interindustry variation to analogous variation in firm size, unionization, wage levels, and the incidence of employer-provided training. While these industry char- acteristics explain some of the interindustry variation in mean wage reductions, they do not explain variation in the tenure or experience profiles of wage reductions.