The pecuniary and non-pecuniary costs of job displacement. The risky job of being back to work

We investigate the pecuniary and non-pecuniary costs of involuntary job loss by focusing on both post-displacement earnings losses and injury rates. Toward this end, we employ a unique dataset that merges administrative data from Italy describing individual work histories with individual data on workplace injuries. We employ propensity score matching techniques to measure the causal effect of displacement on workplace injury rates. We find that in a tight labor market, re-employed displaced workers are exposed to moderate earnings losses and are approximately 60 percent more likely to be injured at their subsequent jobs than are the control group of non-displaced workers. We provide evidence that the estimated effect of displacement on injuries is driven by the transition to new occupations and the risk imposed by the new work environment. These results suggest that re-employed displaced workers may trade pecuniary job attributes for non-pecuniary ones.