Changes in the Age and Education Profile of Displaced Workers

Abstract

This analysis of data from the Displaced Workers Surveys suggests that between the periods 1983-87 and 1993-97, although the likelihood of involuntary job loss declined among most age groups, including older workers, it rose for middle-aged and older workers relative to younger workers. Three potential explanations for this shift the authors investigate are changes in educational attainment, changes in the relationship between education and displacement, and industry shifts that had adverse effects on older workers relative to younger workers. The results of the analysis indicate that the relative displacement rate among college graduates increased over time, but there were few significant changes in the relationship between displacement and education within or across age groups. The probability of displacement increased significantly for workers in service-related industries across all age groups. The results do not conclusively indicate why older workers' relative risk of displacement increased but do rule out several possibilities. n recent years, the media has devoted considerable attention to the effects of downsizing and corporate restructuring on workers, focusing particular attention on the plight of middle-aged, white-collar workers. For example, a cover story in Fortune noted that employers appear to be laying off older workers who were previously protected by their seniority and asked whether workers are now "finished at forty" (Munk 1999). Similarly, the media characterized the downturn in the early 1990s as much tougher than previous recessions on older workers and on white-collar workers, particularly mid-level managers (Labich 1993). Such anecdotal evidence suggests that the incidence of displacement may have increased over time among middle-aged and more educated workers.Previous research indicates that older workers are generally less likely to be displaced than are younger workers. Data from 1968 to 1992 indicate that the likelihood of involuntary job loss is generally lower among men aged 35 and older than The data and programs used to generate the results presented in this paper are available from Madeline

Perceived Job Insecurity and Health: Do Duration and Timing Matter?

“…In part, the disproportionate wage losses that displaced older workers experience reflects their inability to translate firm‐specific human capital acquired in their previous job into equivalent wages upon rehire (Farber ). However, a portion of these wage losses and the longer search periods after job displacement are a product of discriminatory age practices by employers who often view older workers as less adaptable, difficult, and costly to train (Rodriguez and Zavodny ).…”

Employment transitions and labor market exits: Age and gender in the Israeli labor market

“…Since wages and working conditions in ongoing jobs are characterized by implicit long-term contracts and because regulations put restrictions on firing, older workers usually have higher job stability (Johnson & Mommaerts, 2011). What protects older workers from displacement is mainly their experience, indicated by their job tenure, as argued by human capital theory (Farber, 1997(Farber, , 2006Hirsch, Macpherson, & Hardy, 2000;Rodriguez & Zavodny, 2003). In addition, older workers are usually more satisfied with their jobs, more committed to the organization, and less willing to move.…”

“…Moreover, these workers are less likely to leave their jobs voluntarily, because the opportunities open to them in the labor market are constrained, employers being more reluctant to hire older workers. It is therefore reasonable to expect that older workers will be less likely to experience a voluntary job transition (Hirsch et al, 2000;Rodriguez & Zavodny, 2003).…”

WHY HAVE AGGREGATE SKILLED HOURS BECOME SO CYCLICAL SINCE THE MID‐1980s?*

“…A few papers have indeed documented that this has been the case. For example, Rodriguez and Zavodny (2003) analyze data from the Displaced Workers Surveys and document an increase in displacement rates for college educated workers between 1983–87 and 1993–97. Farber (2005) reports a similar trend comparing the 1980s with the 1990–2004 period.…”