Economic crises and unemployment persistence: Analysis of job losses during the Finnish 1990s recession

Tekijät: Jouko Verho

Julkaisu: VATT Working Papers 99

Päiväys: 20.11.2017


This study estimates the effect of job loss for Finnish workers displaced during a severe recession in the early 1990s. The setting provides a sample of workers of which over 90% experienced unemployment after losing a job due to plant closure. We use linked employer-employee data to follow these workers up to 16 years after the job loss and to construct a closely matched comparison group of non-displaced workers. We estimate over 58% initial drop in employment and earnings after the job loss. At the end of follow-up, women's employment and earnings recover fully while men's employment remains 1–5% lower relative to the comparison groups and they suffer a 5–8% earnings loss. We also find large effects on long-term unemployment that diminish slowly and long-lasting effects on poverty risk.

Tutkimuksen pääteemat: Työmarkkinat ja koulutus


ISBN: 978-952-274-206-3 (PDF)

JEL: J64 J65