The Debate About the Consequences of Job Displacement

Abstract

Since the 1970s scholars have shown an increasing interest in the study of the social and economic consequences of plant closure. One strand of research addresses the topic from an economic perspective, investigating the impact of plant closure on workers’ occupational trajectory and financial situation. The main interests of these studies are reemployment rates, unemployment durations and wage differences between the pre- and post-displacement job. Another strand of research strives at understanding the nonpecuniary costs of unemployment, addressing the consequences of job displacement in terms of workers‘ well-being and social life. We try to bridge these different research interests and will propose a model to investigate the impact of plant closure on workers’ lives in a more encompassing way.