High-seniority employees who lost their job during the 1990s as a result of firm closures and mass layoffs suffered substantial losses in earnings, even five years after they were displaced, according to a new study by Statistics Canada.

The study found that, five years after being displaced, workers who lost their job through firm closures and mass layoffs experienced average earnings losses that represented at least 9% of their pre-displacement earnings. Losses incurred by workers with substantial seniority were more pronounced.

Five years after they lost a job, male workers who had at least five years of seniority and found another job experienced losses that represented between 18% and 28% of the earnings they received before their job loss.

For their female counterparts, the losses ranged between 24% and 26% of their pre-displacement earnings.

In 2000 dollars, the average loss in earnings for high-seniority males five years after losing their job varied between $7,100 and $10,900. The corresponding range for women was between $5,500 and $6,100.

The study examined the earnings trajectories of workers who lost their job in the private sector between 1988 and 1997 as a result of firm closures or mass layoffs, and who were aged 25 to 49 at the time.

The study showed that significant losses in earnings occurred among both high-seniority employees who were displaced from manufacturing firms, as well as their counterparts laid off from service-producing companies.

The study’s findings also suggest that labour market conditions were a key determinant of the magnitude of the losses experienced by displaced workers.