Taking Managers Back Out: Occupational Differences in the Risks and Costs of Job Loss, 1982–1997

Abstract

This paper documents changes over the period 1982 to 1997 in the risks and costs of involuntary job loss among different occupational groups. Using data from the Displaced Workers Surveys, it shows that the rate of job loss increased among white-collar workers. This increased displacement risk results from the growing proportion of jobs lost because positions or shifts were abolished, a reason that likely captures the much-publicized effects of corporate restructuring. The evidence regarding occupational shifts in the costs of job loss is mixed: The reemployment rates of all occupational groups rose during the recent economic expansion, and the reemployment chances of those displaced from professional and managerial jobs remained comparatively high. However, the post-displacement wage losses of managerial employees have increased both over time and relative to those of other occupational groups. The increase in the proportionate wage loss of this occupational group is not explained by compositional effects and may be the result of organizational change.