In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers

By Till M. von Wachter, Stefan Bender. Social Science Research Network, 2006

269 citations recorded by the source corpus.

We exploit administrative data on young German workers and their employers to study the long-term effects of an early job loss. To account for non-random sorting of workers into firms with different turnover rates and for selective job mobility, we use changes over time in firm- and age-specific labor demand as an instrument for displacement. We find that wage losses of young job losers are initially 15% but fade to zero within five years. Only workers leaving very large establishments suffer persistent losses. A comparison of estimators implies that initial sorting, negative selection, and voluntary job mobility may have biased previous U.S. studies finding permanent effects of early displacements.

Subfields: Economics and Econometrics, General Health Professions

View Paper: https://www.semanticscholar.org/paper/a811ff9ac7557313d78137368c6d5b52776d75f2

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In Economics and Econometrics

In General Health Professions

Citations in the corpus

Asymmetric Information between Employers (2013, unknown): “Using data on apprentices in Germany, Acemoglu and Pischke (1998) link employer-provided training to asymmetric information and von Wachter and Bender (2006) show that workers released by rms are negatively selected.”
Made in China, Sold in Norway: Local Labor Market Effects of an Import Shock (2015, unknown): “This finding is also in accordance with existing results regarding job displacement in Norway (Huttunen et al., 2011), while for the US, strong and persistent negative wage effects are found for displaced workers (von Wachter and Bender, 2006).”
The linked employer-employee dataset of the IAB (LIAB) (2005, background): “IABDiscussionPaper No. 6/2005 20 Another set of research questions explicitly includes the flow information of individuals in the study, such as for example the studies by Alda (2004e), von Wachter and Bender (2004), Schwerdt and Bender (2003) or Grotheer, Struck, Bellmann & Gewiese (2004).”
Unlucky Cohorts: Estimating the Long-Term Effects of Entering the Labor Market in a Recession in Large Cross-Sectional Data Sets (2018, background): “While identification is difficult, Von Wachter and Bender (2006) pursue an instrumental variables approach based on temporary condition at workers’ first employer.”
Training and Union Wages (2004, background): “Von Wachter and Bender (2006) provide convincing evidence that apprentices who leave the training firm are of lower ability than workers who stay with the training firm. a dummy for whether the worker has a high school degree (Abitur, columns 2 and 5).”