Choosing a Control Group for Displaced Workers
Open accessAbstract
The vast majority of studies on the earnings of displaced workers use a control group of never-displaced workers to examine the effects of initial displacement. This approach attributes earnings declines associated with all future job instability to the initial displacement event, overstating the losses relative to the average treatment effect. In this article, the author’s approach isolates the impact of an average displacement without conditioning on future displacement status in the control group. In comparisons of the standard and alternative approaches using Panel Study of Income Dynamics (PSID) data, the estimated long-run earnings losses fall dramatically from 25% to as low as 5%.
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In non-binary and/or non-staggered designs, when all groups are untreated at period one, DID_l is equivalent to the estimator obtained by redefining treatment as an indicator for ever receiving non-zero treatment and computing Callaway and Sant'Anna (2021) estimator with this binarized and staggerized treatment.
“In non-binary and/or non-staggered designs, when all groups are untreated at period one, DID ℓ is equivalent to the estimator obtained by: 1. redefining the treatment as an indicator equal to one if group g has ever received a non-zero treatment at t , as Deryugina (2017) or Krolikowski (2018), among others, have done in their empirical analysis; 2. computing the estimator of θ es ( ℓ -1) of Calla”
From Difference-in-Differences Estimators of Intertemporal Treatment Effects (2026) · cites this paper as Krolikowski (2018)
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Duan, Y., Jost, O., Jost, R., & Seibert, H. (2026) · Journal of Public Economics · doi:10.1016/j.jpubeco.2026.105579
The unequal job security scars of displacement
Figueiredo, A., Marie, O., & Markiewicz, A. (2026) · Journal of Public Economics · doi:10.1016/j.jpubeco.2025.105562
"Flexible Labor Contracts, Firm-specific Pay, and Wages"Preprint
Uras, B. R., Carreño, J. G., & Huizinga, H. (2025) · SSRN Electronic Journal · doi:10.2139/ssrn.5369794
Collective Wage Co‐ordination and the Costs of Job Displacement
Guerrico, S. F., & Tojerow, I. (2026) · British Journal of Industrial Relations · doi:10.1111/bjir.70055
The economic consequences of exiting self-employment in later life
Lee, J., & Oh, T. (2026) · The Journal of the Economics of Ageing · doi:10.1016/j.jeoa.2026.100648
The cost of job loss in carbon-intensive sectors: Evidence from Germany
Barreto, C., Grundke, R., & Krill, Z. (2026) · Journal of Public Economics · doi:10.1016/j.jpubeco.2026.105779
- Authors
- Krolikowski, P.
- Affiliations
- Federal Reserve Bank of Cleveland (US)
- Corresponding author
- Krolikowski, Pawel
- ORCID
- Krolikowski, Pawel
- Venue
- ILR Review
- Publisher
- SAGE Publications
- Published
- 2017-11-20
- Volume
- 71
- Issue
- 5
- Pages
- 1232-1254
- ISSN
- 0019-7939 (ISSN-L)
- 2162-271X
- PMC
- PMC6167020
- OpenAlex
- W2267874816
- Cited by
- 70
- References
- 60
- Citations by year
- 2026: 5 · 2025: 8 · 2024: 9 · 2023: 12 · 2022: 6 · 2021: 8 · 2020: 8 · 2019: 6 · 2018: 4 · 2017: 3 · 2016: 1
- FWCI
- 10.34
- Type
- journal article
- Language
- en
- Open access
- green
- www.ncbi.nlm.nih.gov
- Locations
- Industrial and Labor Relations Review (publishedVersion)
- PubMed (publishedVersion)
- PubMed Central (acceptedVersion)
- Funders
- National Institute of Child Health and Human Development (R24 HD041028)
- National Institute on Aging (T32 AG000221)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Health Sciences › Health Professions › General Health Professions › Employment and Welfare Studies
- Social Sciences › Demography › Retirement, Disability, and Employment
- Keywords
- displaced workers, earnings losses, control group selection, job displacement, employment instability, treatment effect estimation, long-run earnings
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