The Unequal Consequences of Job Loss Across Countries

Job Displacement Costs of Phasing Out Coal

“…Using the British Household Panel Survey and studying the costs of job loss in the UK, Upward and Wright (2017) find that reassigning earnings during periods of self-employment as zero makes very little difference to the estimated earnings losses. Bertheau et al (2022) also find that a similar exercise using Swedish data results in only minor differences. While these studies find the issue to be negligible, we are unable to say whether it is indeed negligible in our case.…”

“…A well-established literature finds that displaced workers suffer substantive earning losses that persist several years after losing their job (Jacobson et al, 1993;Stevens, 1997;Couch and Placzek, 2010;Davis and von Wachter, 2012;Bertheau et al, 2022). 1 These findings raise concerns regarding the future of millions of coal miners who will likely be displaced and forced to switch sectors if plans to reduce carbon emissions by phasing out coal are implemented due to climate change concerns (United Nations, 2022;Ruppert Bulmer et al, 2021).…”

“…Treatment: Studies focusing on the identification of job displacements, typically rely on mass layoffs in situations in which a firm's employment permanently declines by thirty or more percent over a short period of time such as for example in Davis and von Wachter (2012), Flaaen et al (2019) and Bertheau et al (2022). As discussed in the background section, the dissolution of the coal industry proceeded fairly quickly and was plausibly exogenous to the individual coal miner, implying selection is less of a concern.…”

“…The data is collected through a questionnaire that firms are required by law to complete with reference to payrolls. This system, however, does not include the self-employed, a data limitation which is shared by many other studies in the literature such as for example Jacobson et al (1993), Schmieder et al (2022) and Bertheau et al (2022). 6 These papers deal with this limitation in two distinct ways.…”

“…6 These papers deal with this limitation in two distinct ways. On the one hand, periods without any observed labor earnings in the data are interpreted as zero individual earnings, such as in Schmieder et al (2022) and Bertheau et al (2022). Using the British Household Panel Survey and studying the costs of job loss in the UK, Upward and Wright (2017) find that reassigning earnings during periods of self-employment as zero makes very little difference to the estimated earnings losses.…”