NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Daniel S. Hamermesh

NBER Working Paper No. 2402
Issued in October 1987
NBER Program(s):   LS

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.

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Document Object Identifier (DOI): 10.3386/w2402

Published: Industrial Relations, vol 28, no.1, Winter 1989 pp 51-59

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