What Do We Know About Worker Displacement in the U.S.?

16 Pages Posted: 6 Apr 2007 Last revised: 27 Jul 2022

See all articles by Daniel S. Hamermesh

Daniel S. Hamermesh

University of Texas at Austin - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: October 1987

Abstract

In the United States roughly one-half million workers with 3+ years on the job have become unemployed each year during the 1980s because of plant closings. There is evidence that this represents an increase over earlier periods of similar macroeconomic conditions. Wage cuts within the observed range lower only slightly the probability that a plant will close. The average loss of earnings, due to long spells of post-displacement unemployment and to subsequent reduced wages, is substantial. While minorities suffer an above-average rate of displacement, the earnings losses they experience upon displacement are not disproportionately high. Women and older workers are no more likely than others to become displaced, and their losses are not disproportionate; but workers who have been on the job longer lose more.

Suggested Citation

Hamermesh, Daniel S., What Do We Know About Worker Displacement in the U.S.? (October 1987). NBER Working Paper No. w2402, Available at SSRN: https://ssrn.com/abstract=977431

Daniel S. Hamermesh (Contact Author)

University of Texas at Austin - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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