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Abstract

We document the consequences of losing a job across countries using a harmonized research design and administrative data from Social Security. Workers in Denmark and Sweden experience the lowest earnings declines following job displacement, while workers in Italy, Spain, and Portugal experience losses three times as high. French and Austrian workers face earnings losses somewhere in between. Key to these differences is that Southern European workers are less likely to find employment following displacement. The transition to worse-paying jobs after job displacement explains a substantial portion of wage losses in all countries, around 50% or more in most countries.