insights into worker displacement, job flows and income inequality in ireland using job churn data...
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Insights into worker displacement, job flows and income inequality in Ireland using job churn dataMs. Nóirín McCarthy
School of Economics, University College Cork
Job churn data & Research areas
•The impact of displacement on the earnings of workers in Ireland
•Employment earnings inequality in Ireland
• Job flows in the Irish labour market
The impact of displacement on the earnings of workers
in Ireland
The impact of displacement on the earnings of workers in Ireland
• Dramatic changes in the Irish economy• Increase in the unemployment rate - 14% in 2011• Slow down in economic growth • Many workers became displaced from their employers
• Firm closure• Mass Layoff
• Issues • Earnings losses of displaced workers.• How firm-based and person-based characteristics are related to
earnings losses of displaced workers.• How does the industry a displaced worker finds re-employment in
impact on their earnings?
The impact of displacement on the earnings of workers in Ireland
Year Relative time
Cohort Person id
Firm id
Displaced Pay Age Gender Nationality NACE sector
2005 -2 2007 6 22 1 50000 36 M IRE F 2006 -1 2007 6 22 1 51000 37 M IRE F 2007 0 2007 6 22 1 52000 38 M IRE F 2008 1 2007 6 . 1 . 39 M IRE . 2009 2 2007 6 . 1 . 40 M IRE . 2010 3 2007 6 . 1 . 41 M IRE . 2011 4 2007 6 . 1 . 42 M IRE .
• Displaced individuals matched with non-displaced individuals with similar propensity to be displaced.
• A probit model is used;• Nearest Neighbour matching, • Without replacement,• Caliper to ensure the closeness of the matches.
• Common Support & Balancing tests performed.
The impact of displacement on the earnings of workers in Ireland
Methodology – Propensity score matching
The impact of displacement on the earnings of workers in Ireland - Some findings
The numbers displaced (matched), 2005-2010
Year Closure event Mass-Layoff event
2005 10,221 11,260
2006 14,120 13,603
2007 20,516 10,059
2008 45,258 38,723
2009 32,452 21,724
2010 29,963 13,075
The impact of displacement on the earnings of workers in Ireland - Some findings
The Probability of Employment
1.8
.6.4
.2P
roba
bilit
y of
Em
ploy
men
t
-4 -3 -2 -1 0 1 2 3 4 5 6Relative Time
Displaced Non-displaced
1.8
.6.4
.2P
roba
bilit
y of
Em
ploy
men
t
-4 -3 -2 -1 0 1 2 3 4 5 6Relative Time
Displaced Non-displaced
(b) Mass Layoff(a) Closure
The impact of displacement on the earnings of workers in Ireland - Some findings
The Probability of Employment of displaced 26-35 year olds and displaced 56-64 year olds
(b) Mass Layoff(a) Closure
1.8
.6.4
.2P
rob
abili
ty o
f E
mp
loym
ent
-4 -3 -2 -1 0 1 2 3 4 5 6Relative Time
Displaced 26-35years Displaced 56-64years
1.8
.6.4
.2P
roba
bilit
y of
Em
ploy
men
t
-4 -3 -2 -1 0 1 2 3 4 5 6Relative Time
Displaced 26-35years Displaced 56-64years
The impact of displacement on the earnings of workers in Ireland - Some findings
The Earnings losses of displaced workers
(b) Mass Layoff(a) Closure
0-5
000
-10
000
-15
000
-20
000
Ea
rnin
gs
loss
es
-4 -3 -2 -1 0 1 2 3 4 5 6Relative Time
All cohorts upper/lower
0-5
000
-100
00-1
5000
-200
00E
arni
ngs
loss
es
-4 -3 -2 -1 0 1 2 3 4 5 6Relative Time
All cohorts upper/lower
The impact of displacement on the earnings of workers in Ireland - Some findings
The Earnings losses of displaced workers pre and post 2008
(b) Mass Layoff(a) Closure
0-5
000
-100
00-1
5000
-200
00E
arni
ngs
-5 -4 -3 -2 -1 0 1 2 3 4 5 6Relative Time
2005/2006/2007 cohort 2008/2009/2010 cohort
0-5
000
-100
00-1
5000
-200
00E
arni
ngs
-5 -4 -3 -2 -1 0 1 2 3 4 5 6Relative Time
2005/2006/2007 cohort 2008/2009/2010 cohort
The impact of displacement on the earnings of workers in Ireland - Some findings • Displacement increased over the period in question.
• It appears that those displaced due to mass-layoff are more adversely impacted.
• Other areas under investigation• The role of nationality and earnings losses.
• Those who switch versus stay in the same industry following displacement and earnings losses.
Employment earnings inequality
in Ireland
Employment earnings inequality in Ireland
• Why study income inequality?
• Wilkinson and Pickett (2010) contend that countries with higher levels of income inequality are more likely to also suffer from a wide range of social problems including:
• poorer educational achievement
• lower life expectancy and other inferior health outcomes
• higher levels of violence and crime
Employment earnings inequality in Ireland
• Job churn data
• Sample of 1,406,901 individuals.
• All individuals have a P35 return submitted for all years in the study.
• Measuring earnings inequality: The Gini Coefficient.
Employment earnings inequality in Ireland – Some Findings
Median Pay (including by gender) for the period 2006 to 2010
2006 2007 2008 2009 2010€ 0
€ 5,000
€ 10,000
€ 15,000
€ 20,000
€ 25,000
€ 30,000
€ 35,000
€ 40,000
TotalMaleFemale
Employment earnings inequality in Ireland – Some Findings
Male/Female Earnings Differential (2006 to 2010)
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
Pay Difference 9606 9740 9680 8065 7173
As a % of Fe-male Median pay
0.44 0.396 0.368 0.309 0.283
€ 1,000
€ 3,000
€ 5,000
€ 7,000
€ 9,000
€ 11,000
3%
13%
23%
33%
43%
Employment earnings inequality in Ireland – Some Findings
Earnings Inequality (including by gender) from 2006 to 2010
2006 2007 2008 2009 2010
Total 0.3971 0.3704 0.3643 0.3689 0.3816
Male 0.379 0.354 0.3505 0.3624 0.3801
Female 0.3937 0.3645 0.358 0.359 0.3669
0.33
0.34
0.35
0.36
0.37
0.38
0.39
0.40
0.41
Employment earnings inequality in Ireland – Some Findings
Median Pay by Earnings Quintile
Implications
• For those in employment throughout the period median, earnings increased to 2008 and fell (by a smaller amount) from 2008 to 2010.
• The economic recession in Ireland has led to increased employment income inequality among individuals.
• A gender pay gap exists in Ireland but has diminished over the study period.
• Very few individuals see a dramatic change (move of more than one quintile) in their quintile position.
Job flows & the Irish labour market
Job flows & the Irish labour market
• Other area of investigation• The relationship between international trade and job creation and job
destruction rates.
• How? Link to Census of Industrial Production data.
• Preliminary Findings• Those who did engage in some exporting or importing activity had higher
mean employment.• The employment growth rate was negative over the period 2008-2010, it is
less negative for exporters compared to non-exporters.
Acknowledgements
• I would like to acknowledge the support of my PhD supervisor Prof. Peter Wright, Economics Department, University of Sheffield.
• I would also like to acknowledge the support of PublicPolciy.ie who funded the study on “Employment earnings inequality in Ireland” as well as co-authors Ms. Marie O’Connor, Dr. Meadhbh Sherman and Dr. Declan Jordan, School of Economics, University College Cork.
