par Fernández Guerrico, Sofía 
;Tojerow, Ilan
Référence 14th Workshop on Labour Economics - Institute for Labour Law and Industrial Relations in the European Union (IAAEU)
Publication Non publié, 2022-04-07
;Tojerow, Ilan Référence 14th Workshop on Labour Economics - Institute for Labour Law and Industrial Relations in the European Union (IAAEU)
Publication Non publié, 2022-04-07
Communication à un colloque
| Résumé : | This paper investigates whether flexible pay increases the wage costs of job displacement. We use quasi-exogenous variation in the timing of job loss due to mass layoffs spanning over an institutional reform that restricted single-employer bargaining, the Belgian Wage Norm in 1996. We find that average earnings losses over a ten-year period after displacement are 10 percentage points larger under flexible pay. Workers displaced from jobs with higher employer-specific wage premium—service sector and white-collar—benefit the most from restricted single-employer bargaining as their earnings fully converge to non-displaced workers' earnings within three years. We show that the differences in earnings losses across wage-setting systems are not driven by fluctuations in the business cycle. Our results suggest that reduced pay flexibility may help displaced workers catch up faster to non-displaced workers' pay premium ladder conditional on re-employment. |
