Wage losses of displaced workers in the 1990s
RAND, 1996 - Displaced workers - 41 pages
The large-scale downsizings of the 1990s have renewed interest in the wage losses of displaced workers. This study uses administrative data to follow 833,004 workers in California between 1989 and 1994, providing estimates of the extent of wage losses associated with the recent downsizings. Patterns of wage loss that are similar to those found in studies using different data for different regions and periods are documented. However, the authors do not find that wages decline substantially prior to displacement, which has been found in previous research. The study also finds that wage losses: i) vary substantially among workers; ii) differ by the period of displacement; iii) are related to the economic conditions at the time of displacement; iv) vary by firm size, industry of new employment, and the number of subsequent separations; v) are similar within versus across firms; and vi) in the long-run are 17 to 25 percent. The effects on quarterly versus hourly wages are also explored.
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25 percent administrative data analytic sample assumed California census Counterfactual Wage Current Population Survey declining firms displaced workers display the wages downsizing Duncan Thomas earnings economic conditions Efficiency Wages Employer Identification Number employment declined Employment Development Department estimated FEIN Figure firm throughout firm's employment four quarters hourly wages industry Jacobson JLS's John Strauss Labor and Population Labor Economics LaLonde large number least one co-worker Lillard long-run losses long-run wage loss Losses of Displaced missing employment level number of subsequent number of weeks number of workers pattern of wage Pennsylvania percent of workers Population Program pre-separation wages prior to displacement prior to separation Program Working Paper quarters after displacement quarters prior quartile RAND receiving UI Robert F Ruhm Schoeni selection stayers subsequent separations substantially Sullivan 1993a sum of quarterly tenure variation in wage wage drop wage growth wage paths Wage Profiles Wage Recovery workers displaced workers separating