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


Abstract: We use Canadian administrative data linked to job separation records to understand the anatomy of mass layoffs and job-loss outcomes. Conventional identification approaches mask substantial cross-sectional heterogeneity in mass-layoff separations, mixing layoffs with quits, and employer identifier changes without job losses. Estimates from this homogenized sample severely understate both earnings losses and the role of employer effects in explaining these losses for laid-off workers. Layoffs incur larger and more persistent losses than quits, with moves to lower-paying employers explaining the long-term gap. These findings underscore the importance of distinguishing separation reasons in quantitative models of job dissolution and policy evaluation.

JEL Classification: E24; E32; J31; 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: 2026-10-28

Number: 2023-022

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