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The Heterogeneous Impacts of Job Displacement: Evidence from Canadian Job Separation Records


Abstract: This paper examines the anatomy of mass layoffs using Canadian employer employee data linked to detailed job separation records. We show that mass layoffs are protracted processes characterized by heterogeneous separations that vary in both reason and timing. Layoffs and quits differ sharply in worker characteristics, earnings losses, and employer-premium dynamics, with layoffs leading to larger and more persistent losses. Layoffs prior to mass layoffs disproportionately involve less-productive workers, who fare worse after separation. Our findings underscore the multidimensionality of mass layoff separations, the strategic behavior of employers and workers around mass layoffs, and the implications for quantitative models of job displacement and policy design.

JEL Classification: E24; E32; J31; J63; J65;

https://doi.org/10.20955/wp.2023.022

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Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2025-10-20

Number: 2023-022

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