BANDO DI SELEZIONE PER L'ATTRIBUZIONE DI ASSEGNI DI ...

DIPARTIMENTO DI SCIENZE ECONOMICHE
systematic differences across the two groups. Given wage information over time we can
also present estimates of the earnings change associated with displacement in order to
establish the extent of any pecuniary costs of job displacement.
The western literature on displacement suggests that there are 2 main reasons why there
could be substantial earnings losses for displaced workers. First, if wages grow with
seniority and experience at the firm, then these firm-specific wage premia will be foregone
if workers lose their jobs and find work at a new firm where their wages will lack, initially,
any element of rewards to firm-specific experience. In a restructuring transition economy, if
these type of workers lose their jobs, their skills gained under the old order may not be in
demand. A similar effect could be observed if there are wage premia associated with
unionized jobs. Workers displaced from unionized jobs finding work in non-union jobs
might expect to earn less, other things equal. Institutional features of the welfare state in the
west can cushion job loss by providing unemployment income, job finding help and
subsidized pay in return jobs. However in many transition economies, institutional help is
less likely to be present and hence the ability to ameliorate the costs of job loss are limited
and welfare support systems are rather under-developed and ungenerous, certainly in the
two countries under study (Boeri and Terrell (2002)).
Unions play a relatively minor role in the wage determination process in the two economies,
so it is unlikely that this factor will have much importance. Many transition economies do
however appear to retain elements of the “tariff ladders” from the planned era, which
contain elements of seniority related pay. However, it might be that the nature of a transition
economy, with more rapid restructuring and labor reallocation than in the West, (Davis and
Haltiwanger (1999)), could create a sufficiently dynamic environment where job moves
occur quickly without long intervening spells of unemployment and productivity levels in
the new and restructured sectors offer relatively high wage prospects. In this case, the costs
of job loss could be relatively low.
As is often the case in transition economies, detailed empirical analysis is sometimes
compromised by data availability and quality. However, within this project we will generate
high quality data for Russia (via the displacement supplement to the RLFS) and will also
use the ULMS data that have a very rich component on worker displacement. In addition we
will perform post-displacement surveys of those workers that have left the three firms form
which we will have personnel data. The opportunity to observe displacement in these two
transition economies, where reforms have been relatively sporadic – in particular in Ukraine
- generates more information about the displacement process, by comparing the incidence
and consequences of displacement in these two countries that still are at a much earlier stage
of the transition process than most Central European countries. This information can also be
benchmarked against displacement patterns using comparable data sets from western
economies.
2. Existing Literature
As yet, little empirical evidence on displaced workers exists for transition economies, The
only two papers that we are aware of are Lehmann, Phillips and Wadsworth (2005) and
Orazem, Vodopivec, and Wu (2002), which look at worker displacement in Estonia and
Slovenia respectively (The studies that analyse the fate of German displaced workers, i.e.
Burda and Mertens (1998), Couch (2001) and Bender et al. (2002), do not focus on Eastern