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Economic Change and Worker Displacement in Canada: Consequences and Policy Responses

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  • Riddell, W. Craig

Abstract

Change is an enduring feature of the economy and the labour market, even in normal times. The importance of adjusting to change, and of policies that promote adjustment, has been a recurring theme throughout David Dodge’s distinguished career. This paper deals with “displaced workers,†those who permanently lose their jobs because of changing economic circumstances. I examine what we know about displacement and its consequences, and assess policies designed to assist workers adversely affected by economic change. A central finding of research on displacement is that long tenure displaced workers -- those who have held their jobs for an extended period of time -- suffer much more from losing their jobs than do others. Canada’s Employment Insurance does not take into account this salient feature of the consequences of job loss. The paper discusses ways of addressing this deficiency in our primary social insurance program for job losers.

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File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2033%20-%20Riddell.pdf
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Bibliographic Info

Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2009-41.

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Length: 21 pages
Date of creation: 22 Jul 2009
Date of revision: 22 Jul 2009
Handle: RePEc:ubc:clssrn:clsrn_admin-2009-41

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Web page: http://www.clsrn.econ.ubc.ca/

Related research

Keywords: labour market adjustment; job displacement; unemployment; unemployment insurance; adjustment assistance policies; wage insurance;

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References

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  1. Robert Gibbons & Lawrence Katz, 1989. "Layoffs and Lemons," NBER Working Papers 2968, National Bureau of Economic Research, Inc.
  2. Farber, Henry S., 1999. "Mobility and stability: The dynamics of job change in labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 37, pages 2439-2483 Elsevier.
  3. Jones, Stephen R G & Kuhn, Peter, 1995. "Mandatory Notice and Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 599-622, October.
  4. David Card & Raj Chetty & Andrea Weber, 2007. "Cash-On-Hand and Competing Models of Intertemporal Behavior: New Evidence from the Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 122(4), pages 1511-1560, November.
  5. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-77, October.
  6. 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.
  7. Philip Oreopoulos & Marianne Page & Ann Huff Stevens, 2008. "The Intergenerational Effects of Worker Displacement," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 455-483, 07.
  8. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
  9. Louis S. Jacobson & Robert LaLonde & Daniel G. Sullivan, 2005. "Is retraining displaced workers a good investment?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 47-66.
  10. Timothy Dunne & John Haltiwanger & John Baldwin, 1994. "A Comparison of Job Creation and Job Destruction in Canada and the United States," Working Papers 94-2, Center for Economic Studies, U.S. Census Bureau.
  11. Peter Kuhn & Arthur Sweetman, 1998. "Wage loss following displacement: The role of union coverage," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(3), pages 384-400, April.
  12. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
  13. Jane Friesen, 1997. "Mandatory notice and the jobless durations of displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(4), pages 652-666, July.
  14. Riddell, W. Craig & Song, Xueda, 2009. "The Causal Effects of Education on Adaptability," CLSSRN working papers clsrn_admin-2009-15, Vancouver School of Economics, revised 16 Feb 2009.
  15. Frenette, Marc & Morissette, René & Zhang, Xuelin, 2009. "Earnings Losses of Displaced Workers: Canadian Evidence from a Large Administrative Database on Firm Closures and Mass Layoffs," CLSSRN working papers clsrn_admin-2009-51, Vancouver School of Economics, revised 25 Sep 2009.
  16. Robert J. LaLonde, 1995. "The Promise of Public Sector-Sponsored Training Programs," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 149-168, Spring.
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Cited by:
  1. Jones, Stephen, 2012. "The Effectiveness of Training for Displaced Workers with Long Prior Job Tenure," CLSSRN working papers clsrn_admin-2012-3, Vancouver School of Economics, revised 29 Jan 2012.

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