Earnings losses of workers displaced from manufacturing industries
Public Research Institute, Center for Naval Analyses, 1976 - Business & Economics - 30 pages
A particularly sensitive current policy issue is the effect of changes in tariffs and quotas on employment and earnings. This study examines empirically some of the effects of a permanent labor displacement which might result from changes in international trade policy. Specifically, it presents estimates of how job displacement would change the long-term earnings of workers in 11 industries, and relates the findings to industry characteristics so that they can be projected to industries not directly studied. This study was designed to assist in determining industries in which trade liberalization would impose large losses on workers. Results show that average prime age male workers suffer substantial losses of earnings in industries where the normal rate of labor turnover is low and prime age males make up a high percentage of the total labor force. These industries also tend to be high wage industries. Displacement from the auto and steel industries is estimated to reduce earnings over a 6 year period by about 24%, and by almost as much in several other high wage industries. The estimated loss in low wage industries was much smaller, averaging about 5%, in some cases, such as cotton weaving, no appreciable loss could be detected.
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adjustment factor aerospace age and tenure average annual earnings average earnings comparison group Cotton weaving Dil space Slec displaced workers due to attrition due to displacement dummies Dummy variables earnings generating function earnings of displaced earnings of fall-leavers earnings of workers earnings patterns eleven industries employed employment reduction fall-leaver losses fall-leavers and rise-leavers FALL-LSAVSRS fall-stayers falling SMSA following separation industry characteristics industry employment INSTITUTE 1401 Wilson layoffs Leat Toys clothing leaving due loss due loss estimates losses of displaced losses of fall-leavers Losses of Workers manpower training measure the earnings MEASURING EARNINGS LOSSES ment percent percentage loss point estimates prime age males probability of leaving PUBLIC RESEARCH INSTITUTE quit rate regressions relative rise leavers rise-stayers rising SMSAs sample shown in equation specific human capital standard error statistically significant Steel Auto Leat steel industry tically trade liberalization TV Women's Dil variables Women's Dil space workers displaced workers leaving workers who leave