Lost and found?

Combining the longitudinal dimension and the retrospective calendar of the French Labour Force Survey (2003-2011), we analyse the labour market transitions and outcomes of workers who were dismissed for economic reasons. This study analyses the re-employment patterns of displaced workers and their earnings losses, as is common in the literature, as well as the consequences of displacement for other aspects of job quality. Results suggest that the cost of involuntary job loss is important and goes beyond the fall in earnings. Workers who are made redundant face relatively long spells of non-employment before getting back to work and their new jobs tend to be of lower quality than their pre-displacement jobs along a number dimensions. Re-employed displaced workers suffer a monthly wage penalty of 15-20% and are, on average, nine times as likely to lose their job again as are workers who have not been made redundant. In addition, displaced workers are more likely to work part-time once re-employed, and to have fewer paid holidays and lower job authority than had they not been dismissed, though these differences tend to fall over time.