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The unequal job security scars of displacement

Ana Figueiredo et al.

Journal of Public Economics2026https://doi.org/10.1016/j.jpubeco.2025.105562article
AJG 3ABDC A*
Weight
0.50

Abstract

Segmented labor markets, where stable jobs coexist with insecure, high-turnover positions, make job security key to workers’ long-term outcomes. Using Dutch administrative data, we study the impact of displacement on job security and the role of cash-on-hand. One year after displacement, permanent employment falls by about one-fifth and remains lower five years later, amplifying wage losses: displaced workers who lose job security experience losses 21 % larger than those retaining a permanent contract. Exploiting a policy granting lump-sum transfers only to some displaced workers, we find that eligibility attenuates job security losses and, as a result, wage losses. Effects are larger among liquidity-constrained workers, consistent with binding liquidity constraints. Our findings highlight job security as a key channel through which cash-on-hand reduces the long-run costs of job loss, with implications for the design of unemployment insurance.

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https://doi.org/https://doi.org/10.1016/j.jpubeco.2025.105562

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@article{ana2026,
  title        = {{The unequal job security scars of displacement}},
  author       = {Ana Figueiredo et al.},
  journal      = {Journal of Public Economics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.jpubeco.2025.105562},
}

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The unequal job security scars of displacement

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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