TY  - JOUR
AU  - Haan,Wouter J. den
AU  - Ramey,Garey
AU  - Watson,Joel
TI  - Job Destruction and the Experiences of Displaced Workers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7218
PY  - 1999
Y2  - July 1999
UR  - http://www.nber.org/papers/w7218
L1  - http://www.nber.org/papers/w7218.pdf
N1  - Author contact info:
Wouter J. den Haan
Department of Economics
University of Amsterdam
Roetersstraat
1017 RS  Amsterdam
Netherlands
Tel: +31(0)205255237
E-Mail: wjdenhaan@gmail.com

Garey Ramey
Department of Economics, 0508
University of California, San Diego
La Jolla, CA   92093-0508
Tel: 619/534-5721;  gramey@weber.ucsd.edu
E-Mail: gramey@ucsd.edu

Joel Watson
UC, San Diego
Department of Economics, 0508
9500 Gillman Drive
La Jolla, CA 92093-0508
E-Mail: jwatson@ucsd.edu
AB  - This paper evaluates a class of endogenous job destruction models based on how well they explain the observed experiences of displaced workers. We show that pure reallocation models in which relationship-specific productivity drifts downward over time are difficult to reconcile with the evidence on postdisplacement wages and displacement rates. Pure reallocation models with upward drift can explain the evidence, but implausibly large and persistent negative productivity shocks are required to generate displacements. Combining upward drift with outside benefits or moral hazard as additional motives for displacement makes it possible to explain the evidence with much smaller shocks. Propagation of aggregate shocks, welfare implications of displacement, upgrade of relationships in lieu of displacement, and learning effects are also discussed.
ER  -