Occupational concentration and outcomes for displaced workers

Abstract

Displaced workers who end up changing occupations tend to suffer larger wage losses than those who do not. This paper examines the effect of the occupational concentration of employment in the local labour market (LLM) on the likelihood of being employed and (conditional on employment) having changed occupations for displaced workers. I find that workers who do not possess a postsecondary degree are less likely to be employed or to have changed occupations in more occupationally concentrated labour markets. By contrast occupational concentration does not affect these outcomes for more educated workers. These findings are consistent with a pattern where less educated workers focus job searches within their current LLM.