CAUSES AND CONSEQUENCES OF LAYOFFS

Abstract

Using probit analysis, this article finds that differential treatment accounts for a substantial portion of the higher layoff rates of blacks in comparison to whites. However, women are found to be considerably less prone to layoffs than men with similar characteristics. Among those who obtained subsequent employment (taking into account the possible selectivity bias in such a subsample), white males are hurt more by layoffs than black males in terms of both short-term and long-term earnings growth; women's earnings are not necessarily affected by layoff at all. However, whites and males are found to be more likely to be reemployed than blacks and females, respectively.