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The Changing Face of Job Loss in the United States, 1981-1993

  • Henry S. Farber
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    I examine changes in the incidence and consequences of job loss by reported cause between 1981 and 1993 using data from Displaced Workers Surveys (DWS), conducted as part of the Current Population Survey (CPS) in even years since 1984. The overall rate of job loss is up somewhat in the 1990s. The increase in job loss is larger for older and more educated workers, but younger and less-educated workers continue to have the highest rates of job loss. Some significant changes are also found in the rate of job loss by reported reason. Next I examine the consequences of displacement for several post- displacement labor market outcomes, including the probability of employment, full-time/part-time status, the change in earnings, job stability, and self-employment status. The adverse consequences of job loss, which have always been substantial, do not appear to have changed systematically over time. More educated workers suffer less economic loss relative to income due to displacement than do the less educated. Self-employment appears to be an important response to displacement, and older workers and the more educated are more likely to turn to self-employment.

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    File URL: http://www.nber.org/papers/w5596.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5596.

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    Date of creation: May 1996
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    Publication status: published as Farber, Henry S. "What Do We Know About Job Loss In The United States? Evidence From The Displaced Workers Survey, 1984-2004." FRB Chicago - Economic Perspectives, QII (2005): 13-28.
    Handle: RePEc:nbr:nberwo:5596
    Note: LS
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    1. Kletzer, Lori Gladstein, 1989. "Returns to Seniority after Permanent Job Loss," American Economic Review, American Economic Association, vol. 79(3), pages 536-43, June.
    2. 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.
    3. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-80, October.
    4. 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.
    5. Robert E. Hall, 1984. "The Importance of Lifetime Jobs in the U.S. Economy," NBER Working Papers 0560, National Bureau of Economic Research, Inc.
    6. Michael Podgursky & Paul Swaim, 1987. "Job displacement and earnings loss: Evidence from the Displaced Worker Survey," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 41(1), pages 17-29, October.
    7. Daniel Parent, 1995. "Industry-Specific Capital and the Wage Profile: Evidence from the NLSY and the PSID," CIRANO Working Papers 95s-26, CIRANO.
    8. 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 206-33, April.
    9. Topel, Robert, 1990. "Specific capital and unemployment: Measuring the costs and consequences of job loss," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 33(1), pages 181-214, January.
    10. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
    11. Ureta, Manuelita, 1992. "The Importance of Lifetime Jobs in the U.S. Economy, Revisited," American Economic Review, American Economic Association, vol. 82(1), pages 322-35, March.
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