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Has the Displacement of Older Workers Increased?

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Author Info

  • Alicia H. Munnell
  • Steven Sass

    ()
    (Center for Retirement Research, Boston College)

  • Mauricio Soto

    (Center for Retirement Research, Boston College)

  • Natalia Zhivan

Abstract

The employment of older workers into their mid-60s will be critical to their ability to ensure a secure retirement. One of the risks threatening the ability to work to older ages is being “displaced,” with displacement defined as the elimination of the worker’s job due to a shift in the demand for labor. Displacement can easily throw 50-year-old workers off course, disrupt their retirement saving plans, and lead to premature retirement. This paper explores the relationship between job loss and age over the period 1984-2004 using the biennial Displaced Worker Supplement to the Current Population Survey. It finds that no major trends in the displacement of older workers have occurred over the 11 Displaced Worker Surveys conducted during the period. Re-employment rates for older workers appear to have improved. And the earnings loss associated with the displacement of older workers has not changed significantly. Two other significant findings relate to tenure and education. First, the historical protection that older workers appeared to have against displacement was due to tenure not to age per se. Controlling for tenure, the probability of displacement increases with age. Second, college education is no longer a source of significant protection in the world of displacement, and its importance has declined sharply for re-employment.

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Bibliographic Info

Paper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2006-17.

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Length: 43 pages
Date of creation: Sep 2006
Date of revision: Sep 2006
Handle: RePEc:crr:crrwps:wp2006-17

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Keywords: older workers; displacement; retirement; saving plans; job loss; tenure; education; re-employment; earnings loss;

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References

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  1. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992. "Earnings losses of displaced workers," Working Paper Series, Macroeconomic Issues 92-28, Federal Reserve Bank of Chicago.
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  17. Robert G. Valletta, 1991. "Job Tenure and Joblessness of Displaced Workers," Journal of Human Resources, University of Wisconsin Press, vol. 26(4), pages 726-741.
  18. Robert Hutchens, 1988. "Do job opportunities decline with age?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 42(1), pages 89-99, October.
  19. Gottschalk, Peter & Moffitt, Robert, 1999. "Changes in Job Instability and Insecurity Using Monthly Survey Data," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages S91-126, October.
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Citations

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Cited by:
  1. Natalia Zhivan & Steven A. Sass & Margarita Sapozhnikov & Kelly Haverstick, 2008. "An "Elastic" Earliest Eligibility Age for Social Security," Issues in Brief ib2008-8-2, Center for Retirement Research, revised Feb 2008.
  2. Alicia H. Munnell & Dan Muldoon & Steven A. Sass, 2009. "Recessions and Older Workers," Issues in Brief ib2009-9-2, Center for Retirement Research, revised Jan 2009.
  3. Kelly Haverstick & Margarita Sapozhnikov & Robert K. Triest & Natalia Zhivan, 2008. "A new approach to raising Social Security’s earliest eligibility age," Public Policy Discussion Paper 08-4, Federal Reserve Bank of Boston.
  4. Courtney Coile & Phillip B. Levine, 2009. "The Market Crash and Mass Layoffs: How the Current Economic Crisis May Affect Retirement," NBER Working Papers 15395, National Bureau of Economic Research, Inc.
  5. Alicia H. Munnell & Steven A. Sass & Natalia A. Zhivan, 2009. "Why Are Older Workers At Greater Risk of Displacement?," Issues in Brief ib2009-9-10, Center for Retirement Research, revised May 2009.

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