Photo Hugues Siegenthaler

5 shut down Swiss companies used as a case study on unemployment

For the thesis project of Isabel Baumann, graduate assistant at the Institute of Social Sciences at the University of Lausanne, 750 former employees of bankrupted or relocated firms in Geneva and elsewhere responded to a questionnaire on the consequences of redundancy. This survey will provide a better picture of winners and losers.

1200 people who lost their jobs after plant closures in Geneva, Bern and Solothurn between early 2009 and mid-2010 received in fall 2011 a questionnaire about their current situation on a occupational, financial and personal level. 63% of these people responded to the survey, whose data are now being analyzed as part of the thesis of Isabel Baumann, PhD student at LIVES and Life course and Social Inequality Research Center (LINES), who presented her project on February 13, 2012 during the first “Doctoriales” of NCCR LIVES.

The five companies, formerly active in the areas of machine and printing industries, have experienced different fates: at best, the employees were dismissed with six-month notice and compensation; at worse, the entire workforce lost its job from one day to another without any indemnity.

The collected data indicate that two thirds of respondents were working again at the time of the survey, about two years after the plant closure, and half had found a new job within two months. Isabel Baumann’s hypothesis is that employers hire a person more easily when dismissed collectively than another type of unemployed because they believe the candidate's personal skills were not responsible for his dismissal. This theory will be verified by comparing the sample with a database of people with a similar profile but that did not undergo mass layoffs.

Maintain the skills

Another hypothesis states that workers, who accepted a temporary job as a transitory career step, face lower wage losses than workers with the same unemployment spell but without a temporary job. "I expect this result because a temporary job prevents the loss of occupational skills, and is interpreted by employers as a signal of motivation," says the doctoral student.

The thesis of Isabel Baumann will focus on those whose wellbeing and wages have been particularly impacted, positively or negatively, by the plant closure and reintegration to the labor market. 20% of workers have finally found a better paying job and 30% suffer wage losses. Among these, the doctoral student expects to see especially the low skilled, the older people, those who don’t speak well the local language or those having remained long in the same job, whose occupational skills are less easy to transfer. On the contrary, it is expected that the winners will be overrepresented among people with more general skills such as management, supervision or communication.

Concerning the impacts on social life and health, the relationships with friends and family were relatively unaffected by the event, contrary to the psychological health, which is most impacted, positively or negatively, by redundancy and its consequences. A closer analysis of the results will help better understand these mechanisms.