What Happens to the Employers Involved in Mass Layoffs?

Elizabeth Weber Handwerker and Lowell G. Mason

Abstract

We apply the empirical framework of the displaced worker literature to the study of outcomes for displacing employers. Long-term patterns of employment, average wages, and closure probabilities before and after mass layoffs vary by the reason for layoffs, the industry of employers, employer age, and the period in which the layoff took place. Employers with mass layoffs during the Great Recession and the recovery that has followed have different patterns of employment levels and closure probabilities than employers with layoffs in previous periods. These differences are not explained by changes in the observable characteristics of employers and layoffs.