Redundancy duration and business alteration – Consequences of establishment closures in Sweden

Arbetslöshet, Arbetsmarknad, Cecilia Magnergård, Establishment closure, Företagsnedläggning, Kreativ förstörelse, Kristina Nyström, Strukturell transformation
Cecilia Magnerg̴rd РRedundancy duration and business alteration
Ladda ner


This thesis follows and analyses what happens to individuals who work at establishments that are closed down. I examine if and when the displaced workers are re-employed. Furthermore, I examine to what extent individuals have moved, changed industry of work, have started to commute or have become self-employed. Additionally I examine, if the workers become self- employed after displacement, how many of them that does so within the same industry of work as they initially got displaced from. A unique longitudinal matched employer-employee data incorporating all firms, establishments and their employees in Sweden between the years 1997-2008 is used. All individuals between 25 and 55 years of age at the time of displacement that were displaced between 2000 and 2003 due to establishment closures are followed over a five-year period of time. Consistent with previous empirical research, it is shown that an absolute majority of the workers that are displaced one given year also recovers within that same year. The results moreover express that the longer the displaced workers are out of employment, the larger is the willingness to change industry of work, change municipality of living or move into self-employment. The willingness to commute is however found to be fairly constant over time. Finally, I find that those who become self-employed to a greater extent start business in other industries than they were displaced from as time passes.

Mastersuppsats: ”Redundancy duration and business alteration – Consequences of establishment closures in Sweden”, Cecilia Magnergård (KTH 2013).

Cecilia Magnergård kartlägger i uppsatsen effekterna för anställda vid ett företags nedläggning. Kristina Nyström har varit handledare och arbetet ingår i forskningsprojektet Kompetens för tillväxt, som bedrivs av Ratio med finansiellt stöd av bl a Vinnova.

Uppsatsen följer och analyserar vad som händer med personer som arbetar i organisationer som läggs ner. Författaren undersöker om och när de återanställs. Dessutom undersöker författaren i vilken utsträckning individer har flyttat, bytt bransch eller yrke, har börjat pendla eller har blivit egenföretagare.

Liknande innehåll

Working Paper No. 333: Balancing employment protection and what’s good for the company
Working paperPublikation
Stern, C. & Weidenstedt, L.


Publicerat i

Ratio Working Paper


Like most developed countries, Sweden has institutionalized employment protection legislation, called LAS. LAS is interesting theoretically because parts of it are semi-coercive. The semi-coerciveness makes it possible for firms and unions under collective agreements to negotiate departures from the law, for instance regarding seniority rules and terminations due to employees’ fit and/or misconduct. In this sense, the law is more flexible than the legal text suggests. The present study explores how the semi-coercive institution of employment protection is perceived and implemented by managers of smaller manufacturing companies. The results suggest that managers support the idea of employment protection rules in principle but face a difficult balancing act in dealing with LAS. Thus, the institutional legitimacy of the law is low. LAS ends up producing local cultures of hypocrisy and pretense. The paper gives insights into how institutions aimed at producing good moral behavior sometimes end up producing the opposite.

Working paper No. 276: Regional resilience to displacement
Working paperPublikation
Nyström, K.


Publicerat i

Ratio Working Paper


This paper contributes to knowledge about regional resilience to displacement and examines the extent to which the characteristics of the i) regional closures, ii) individuals in a region, iii) regional industry, iv) regional economy and v) regional attractiveness influence the re-employment of displaced employees. The results indicate that regions where the average size of establishment closures is large or the regional displacement rate is high exhibit increased resilience in terms of re-employing displaced employees in the same region. Unrelated and related industrial variety are positively related to resilience to displacement in regions with low re-employment capacities, whereas there is some evidence that regional attractiveness is positively related to resilience in regions with a good ability to re-employ displaced employees.
Related content: Regional resilience to displacement

New firms as employers: The wage penalty for voluntary and involuntary job switchers
Artikel (med peer review)Publikation
Nyström, K. & Zhetibaeva Elvung, G.


Publicerat i

According to previous research, new firms pay lower wages (Shane, 2009). However, previous studies have been unable to control for the possibility that the opportunity costs of accepting employment at new firms may differ across individuals. In this paper, we investigate whether a wage penalty for being employed at a new firm exists if we take the individual employee’s experience and status in the labour market into consideration. We focus on individuals who decide to switch jobs and use matched employee-employer data about all firms and employees in Sweden for the period 1998-2010. Our results show that the share of job transitions into lower wages are higher for those who switch to new firms compared to incumbent firms (40 percent and 31 percent respectively). Our endogenous wage equation estimates indicate that being an involuntary job switcher has an equally negative effect on wages at both new and incumbent firms. However, the positive effect of education on wages is more pronounced for job switchers selecting into incumbent firms.

Visa fler

Ratio är ett fristående forskningsinstitut som forskar om hur företagandets villkor kan utvecklas och förbättras.

Sveavägen 59 4trp

Box 3203

103 64 Stockholm

Postgiro: 382621-1


Bankgiro: 512-6578