The Incidence and Costs of Job Loss: 1982-91

Abstract

THERE IS A PUBLIC PERCEPTION that the nature and consequences of job loss, defined here as the involuntary (from the worker's viewpoint) termination of employment with a particular firm, have changed qualitatively in recent years.The perception is that highly skilled whitecollar workers and workers with more tenure (time with their current employer) are becoming increasingly vulnerable to job loss, reduced subsequent earnings, and prolonged unemployment.'My goal in this study is to investigate whether and how the incidence and costs of job loss have changed in the last ten years.In other words, is the public perception correct?Data limitations make it difficult to get a perspective on who lost jobs prior to the 1980s.Since then, however, the Displaced Workers' Surveys (DWS), which have been regular supplements to the January Current Population Survey (CPS) at two-year intervals since 1984, have provided useful information on job loss.Specifically, these surveys ask workers if in the past five years they have "lost or left a job because of a plant closing, an employer going out of business, a layoff from which [they were] not recalled or other similar reason."These data I thank David Card for numerous helpful discussions that helped shape this paper.