TY  - JOUR
AU  - Hu,Luojia
AU  - Taber,Christopher
TI  - Layoffs, Lemons, Race, and Gender
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11481
PY  - 2005
Y2  - July 2005
UR  - http://www.nber.org/papers/w11481
L1  - http://www.nber.org/papers/w11481.pdf
N1  - Author contact info:
Luojia Hu
E-Mail: luojiahu@northwestern.edu

Christopher R. Taber
Department of Economics
University of Wisconsin -Madison
1180 Observatory Dr
Social Sciences Building #6448
Madison, WI 53706-1320
Tel: (608) 263-7791
Fax: (608) 262-2033
E-Mail: ctaber@ssc.wisc.edu
M2  - featured in NBER digest on 2005-07-11
AB  - This paper expands on Gibbons and Katz (1991) by looking at how the difference in wage losses across plant closing and layoff varies with race and gender. We find that the differences between white males and the other groups are striking and complex. The lemons effect of layoff holds for white males as in Gibbons and Katz model, but not for the other three demographic groups (white females, black females, and black males). These three all experience a greater decline in earnings at plant closings than at layoffs. This results from two reinforcing effects. First, plant closings have substantially more negative effects on minorities than on whites. Second, layoffs seem to have more negative consequences for white men than the other groups. We also find that the relative wage losses of blacks following layoffs increased after the Civil Rights Act of 1991 which we take as suggestive of an informational effect of layoff as in Gibbons and Katz. The results are suggestive that the large losses that African Americans experience at plant closing could result from heterogeneity in taste discrimination across firms.
ER  -