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Has the Displacement of Older Workers Increased?

Author Info

Listed author(s):
  • 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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File URL: http://crr.bc.edu/working-papers/has-the-displacement-of-older-workers-increased/
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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 listed on IDEAS
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  1. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-380, October.
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  19. Daniel Rodriguez & Madeline Zavodny, 2003. "Changes in the Age and Education Profile of Displaced Workers," ILR Review, Cornell University, ILR School, vol. 56(3), pages 498-510, April.
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Cited by:

  1. 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.
  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 Triest & Natalia Zhivan, 2007. "A New Approach to Raising Social Security's Earliest Eligibility Age," Working Papers, Center for Retirement Research at Boston College wp2007-19, Center for Retirement Research, revised Oct 2007.
  4. Coile Courtney C & Levine Phillip B, 2011. "The Market Crash and Mass Layoffs: How the Current Economic Crisis May Affect Retirement," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-42, April.
  5. Courtney C. Coile & Phillip B. Levine, 2010. "Recessions, Reeling Markets, and Retiree Well-Being," NBER Working Papers 16066, National Bureau of Economic Research, Inc.
  6. 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.

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