July 2005

IZA DP No. 1650: Job Displacement Penalties in Japan

Michael L. Bognanno, Lisa Delgado

published in: Research in Labor Economics, 2008, 28, 225-250

The costs of job displacement are examined on a sample of Japanese workers successfully provided job placement services from 2000 to 2003, a period of economic stagnation and structural change in Japan. We find that displaced workers suffer a loss of approximately $1,100 for each additional year of age. Workers also incur a large penalty when they change industries after being displaced. The age-earnings loss relationship is consistent with the operation of a delayed compensation scheme in large firms.