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Are displaced workers now finished at age forty?

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  • Daniel Rodriguez
  • Madeline Zavodny

Abstract

In recent years, the media has devoted considerable attention to the effects of downsizing and corporate restructuring on U.S. workers. Economists as well as the media have focused in particular on the plight of laid-off, or "displaced," middle-aged workers. Because many displaced workers incur significant costs, the displacement rate and the effects of displacement on workers are of concern to policymakers. ; The conventional wisdom that middle-aged workers face an increased risk of being displaced and increased difficulties after displacement is partially borne out by this article's analysis. Displacement rates among middle-aged workers rose relative to younger workers during the 1990s recession, and the relative likelihood of displacement for middle-aged workers has not returned to the levels of the 1980s. Thus, workers in their forties are relatively more likely to have been displaced in the 1990s than in the 1980s. However, the two postdisplacement outcomes examined here, reemployment and earnings losses, have not changed significantly over time for older workers relative to younger workers. ; According to the authors, the data also suggest that much of the concern about displacement may soon begin to abate. Displacement rates during 1995-97 returned to levels similar to those during the 1980s expansion. Reemployment rates for workers displaced during 1995-97 were at their highest levels for all age groups since the mid-1980s, and the gap between pre- and postdisplacement earnings has shrunk during the most recent period.

Suggested Citation

  • Daniel Rodriguez & Madeline Zavodny, 2000. "Are displaced workers now finished at age forty?," Economic Review, Federal Reserve Bank of Atlanta, issue Q2, pages 33-48.
  • Handle: RePEc:fip:fedaer:y:2000:i:q2:p:33-48:n:v.85no.2
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    References listed on IDEAS

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    1. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    2. Daniel Aaronson & Kenneth Housinger, 1999. "The impact of technology on displacement and reemployment," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 14-30.
    3. John T. Addison & Douglas A. Fox & Christopher J. Ruhm, 1996. "Trade Sensitivity, Technology, and Labor Displacement," NBER Working Papers 5621, National Bureau of Economic Research, Inc.
    4. 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 91-126, October.
    5. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
    6. Diebold, Francis X & Neumark, David & Polsky, Daniel, 1997. "Job Stability in the United States," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 206-233, April.
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    Cited by:

    1. Koeber, Charles & Wright, David W., 2006. "Gender differences in the reemployment status of displaced workers human capital as signals that mitigate effects of bias," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(5), pages 780-796, October.
    2. Bhattacharya, Joydeep & Reed, Robert, 2003. "Aging, Unemployment, and Welfare in a Life-Cycle Model with Costly Labor Market Search," Staff General Research Papers Archive 10255, Iowa State University, Department of Economics.
    3. 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.
    4. Madeline Zavodny, 2000. "Technology and job retention among young adults, 1980-98," FRB Atlanta Working Paper 2000-7, Federal Reserve Bank of Atlanta.

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    Keywords

    Demography ; Labor supply ; Labor turnover;

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