Stefan Bastholm Andrade’s scientific contributions

In this paper, we examine the cost of job loss to household incomes, and the extent to which initial losses are compensated through the market, within the household and by the social security programmes. We use high quality survey and administrative data from Denmark, Finland, Germany and the UK for the period of 1990-2018 and monitor incomes after job loss using a difference-in-differences design. Our findings reveal significant penalties on household incomes (around 4-6% of previous earnings) for most countries that are higher in the UK in the short-term and relatively persistent and long-term in Finland and Germany. Market appears to be the primary mechanism of compensation in all countries, while the relative importance of household and state compensations vary across countries in line with their compensation strategies. State compensation generally plays a crucial role in mitigating immediate income losses except for the UK, while market compensation becomes more important over time in all countries. Household compensation mainly acts as a substitute for other types of compensations, and is therefore significantly higher in the UK and Germany where market and/or state compensations are much lower compared to the Nordics.