Association for Public Policy Analysis & Management

This paper estimates the effect of MSA labor market characteristics on employment outcomes for displaced workers. Specifically, we investigate the role played by MSA size and occupational distribution on the probability of being employed, the likelihood of changing occupations for those workers who are employed, and the degree of dissimilarity between the old and new occupations for those workers who do switch occupations. We find strong evidence the occupational share of employment for the job from which a worker was displaced has a positive effect on the likelihood of being reemployed and a negative effect on the likelihood of switching occupations. There is weaker evidence for a positive link between (i) the dissimilarity between the occupation of the job from which a worker was displaced and the other jobs in the individual’s MSA and (ii) the dissimilarity between the old and new jobs for workers who did change occupations.