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Evidence of Preseparation Earnings Losses in the Displaced Worker Survey

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  • Sara de la Rica

Abstract

This paper attempts to quantify preseparation earnings losses of workers displaced in mass layoffs using the Displaced Worker Survey, the largest and most representative sample of displaced workers. Using the 1986 Displaced Worker Survey and random samples of the 1984 and 1985 Current Population Survey as a comparison group, it is found that workers lose on average 9 percent of their earnings prior to separation as a result of wage cuts. This result is very similar to the preseparation losses found in other studies using different data sources. One implication of this finding is that those studies that only take into consideration the post-displacement losses of workers displaced in mass layoffs clearly underestimate the total costs suffered by these workers.

Suggested Citation

  • Sara de la Rica, 1995. "Evidence of Preseparation Earnings Losses in the Displaced Worker Survey," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 610-621.
    • Handle: RePEc:uwp:jhriss:v:30:y:1995:i:3:p:610-621
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    Cited by:

    1. Eliason, Marcus, 2011. "Assistant and auxiliary nurses in crisis times: earnings and employment following public sector job loss in the 1990s," Working Paper Series 2011:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Amynah Vanessa Gangji & Robert Plasman, 2007. "The Matthew effect of unemployment: how does it affect wages in Belgium," DULBEA Working Papers 07-19.RS, ULB -- Universite Libre de Bruxelles.
    3. David S. Kaplan & Raymond Robertson & Gabriel Martínez González, 2005. "What Happens to Wages after Displacement?," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 197-242, January.
    4. Song, Younghwan, 2007. "Recall bias in the displaced workers survey: Are layoffs really lemons?," Labour Economics, Elsevier, vol. 14(3), pages 335-345, June.
    5. Roger White, 2010. "Long-run wage and earnings losses of displaced workers," Applied Economics, Taylor & Francis Journals, vol. 42(14), pages 1845-1856.
    6. Jason M. Lindo, 2010. "Are Children Really Inferior Goods? Evidence from Displacement-Driven Income Shocks," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).

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