Midlife and older displaced workers: A comparison of predisplacement and new earnings

Abstract

The economic consequences of business closings and worker layoffs are of great concern to today's work force. The study compares earnings of 755 workers previous to displacement to 422 displaced workers with new earnings. Variables are identified using the data supplement of the 1988Current Populations Survey: Displaced Workers. Displaced workers employed in professional and white-collar positions have more favorable predisplacement earnings and new earnings than workers from other job sectors, but displaced workers who are homeowners and those who have health care coverage before and following job displacement have a decline in earnings. Displaced workers with some high school education and workers with 30 to 39 years of job tenure also experience decreased wages. Overall, displacement of American workers stifles the economy and negatively influences the human capital of the nation's work force.