Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2023-11-01
Number: 23-072/V
Author-Name: Ana Figueiredo
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Olivier Marie 
Author-Workplace-Name: Erasmus University Rotterdam
Author-Name: Agnieszka Markiewicz
Author-Workplace-Name: Erasmus University Rotterdam
Title: Job Security and Liquid Wealth
Abstract: We study changes in job security after displacement and exploit eligibility rules for lump-sum payments in the Netherlands to investigate the role of liquid wealth. Within five years of job loss, the likelihood of being a permanent worker remains 12% lower for displaced workers. Those eligible to a lump-sum transfer experience a significantly smaller negative shock to job security. This effect is driven by workers with low liquid wealth, pointing to liquidity constraints as an important mechanism linking unemployment and job security. Finally, we estimate that losses in job security can explain 21% of the wage cost associated with job displacement.
Classification-JEL: D31, E24, J65
Keywords: Wealth inequality, Job loss, Job security heterogeneity
ExperimentFile-URL: https://papers.tinbergen.nl/23072.pdf
File-Format: application/pdf
File-Size:4.141.943 bytes
Handle: RePEc:tin:wpaper:20230072