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

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  • Daniel S. Hamermesh

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.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2402.

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Date of creation: Oct 1987
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Publication status: published as Industrial Relations, vol 28, no.1, Winter 1989 pp 51-59
Handle: RePEc:nbr:nberwo:2402

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  1. Hamermesh, Daniel S, 1987. "The Costs of Worker Displacement," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 102(1), pages 51-75, February.
  2. Grossman, Gene M., 1986. "Imports as a cause of injury: The case of the U.S. steel industry," Journal of International Economics, Elsevier, Elsevier, vol. 20(3-4), pages 201-223, May.
  3. Madden, Janice Fanning, 1987. "Gender Differences in the Cost of Displacement: An Empirical Test of Discrimination in the Labor Market," American Economic Review, American Economic Association, American Economic Association, vol. 77(2), pages 246-51, May.
  4. Nancy R. Folbre & Julia L. Leighton & Melissa R. Roderick, 1984. "Plant closings and their regulation in Maine, 1971รป1982," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 37(2), pages 185-196, January.
  5. Daniel J. B. Mitchell, 1985. "Shifting Norms in Wage Determination," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(2), pages 575-608.
  6. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
  7. Bale, Malcolm D., 1976. "Estimates of trade-displacement costs for U.S. workers," Journal of International Economics, Elsevier, Elsevier, vol. 6(3), pages 245-250, August.
  8. Blau, Francine D & Kahn, Lawrence M, 1981. "Causes and Consequences of Layoffs," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 19(2), pages 270-96, April.
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