Working Paper Series,
Stockholm University, Swedish Institute for Social Research

Abstract: This paper studies how labor market pooling, calculated as regional concentrations of employment in related industries and related occupations, affects the job outcomes of displaced workers. Using matched employer-employee data for displaced workers between 2003-2009 in Sweden, the results show that all workers experience a drop in earnings after displacement. However, the earning losses of workers who lose their jobs in markets with higher labor market pooling are lower. Two mechanisms are highlighted to why this is the case - (1) better job match and (2) higher probability of getting a better job than the pre-displacement one.

Keywords: job matching; labor market pooling; displaced workers; occupational upgrade

JEL-codes: J24; J62; J65

Language: English

38 pages, August 12, 2022

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