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

Abstract

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), con- ducted as part of the Current Population Survey (CPS) in even years since 1984. The overall rate of job loss is up somewhat in the 1990’s. 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. The rate of job loss due to plant closings has been fairly constant over time while the rate of job loss due to ” slack work” moves counter-cyclically. The most substantial changes are increases in the last several years in rates of job loss due to ”position or shift abolished” and for other (unspecified) reasons. These changes in composition are larger among more educated workers. Next I examine the consequences of displacement for several post-displacement labor market outcomes, including the probabil- ity of employment, full-time/part-time status, earnings, job stability, and self-employment status. The 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. The more educated have higher post-displacement employment rates, are more likely to be employed full-time, have more stable employment histories, and suffer smaller proportional earnings losses on average. 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. Workers dis- placed due to slack work are substantially less likely to be reemployed, and, among those reemployed, are more likely to be working part-time relative to workers displaced for other reasons.