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Has the Displacement of Older Workers Increased?

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Author Info
Alicia H. Munnell
Steven Sass () (Center for Retirement Research, Boston College)
Mauricio Soto (Center for Retirement Research, Boston College)
Natalia Zhivan

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Abstract

The employment of older workers into their mid-60s will be critical to their ability to ensure a secure retirement. One of the risks threatening the ability to work to older ages is being “displaced,” with displacement defined as the elimination of the worker’s job due to a shift in the demand for labor. Displacement can easily throw 50-year-old workers off course, disrupt their retirement saving plans, and lead to premature retirement. This paper explores the relationship between job loss and age over the period 1984-2004 using the biennial Displaced Worker Supplement to the Current Population Survey. It finds that no major trends in the displacement of older workers have occurred over the 11 Displaced Worker Surveys conducted during the period. Re-employment rates for older workers appear to have improved. And the earnings loss associated with the displacement of older workers has not changed significantly. Two other significant findings relate to tenure and education. First, the historical protection that older workers appeared to have against displacement was due to tenure not to age per se. Controlling for tenure, the probability of displacement increases with age. Second, college education is no longer a source of significant protection in the world of displacement, and its importance has declined sharply for re-employment.

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Paper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2006-17.

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Length: 43 pages
Date of creation: Sep 2006
Date of revision: Sep 2006
Handle: RePEc:crr:crrwps:wp2006-17

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Related research
Keywords: older workers displacement retirement saving plans job loss tenure education re-employment earnings loss

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References listed on IDEAS
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  1. Robert Hutchens, 1988. "Do job opportunities decline with age?," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 42(1), pages 89-99, October.
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    Other versions:
  4. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March. [Downloadable!] (restricted)
  5. Daniel Rodriguez & Madeline Zavodny, 2003. "Changes in the age and education profile of displaced workers," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 56(3), pages 498-510, April.
  6. Kletzer, Lori G, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-36, Winter. [Downloadable!] (restricted)
  7. Gottschalk, Peter & Moffitt, Robert, 1999. "Changes in Job Instability and Insecurity Using Monthly Survey Data," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages S91-126, October. [Downloadable!] (restricted)
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    Other versions:
  9. Jaeger, David A. & Stevens, Ann Huff, 1999. "Is Job Stability in the United States Falling?," IZA Discussion Papers 35, Institute for the Study of Labor (IZA). [Downloadable!]
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  14. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September. [Downloadable!] (restricted)
    Other versions:
  15. Altonji, Joseph G & Shakotko, Robert A, 1987. "Do Wages Rise with Job Seniority?," Review of Economic Studies, Blackwell Publishing, vol. 54(3), pages 437-59, July. [Downloadable!] (restricted)
    Other versions:
  16. Chan, Sewin & Stevens, Ann Huff, 2001. "Job Loss and Employment Patterns of Older Workers," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 484-521, April. [Downloadable!] (restricted)
  17. John T. Addison & Douglas A. Fox & Christopher J. Ruhm, 1996. "Trade Sensitivity, Technology, and Labor Displacement," NBER Working Papers 5621, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Diebold, Francis X & Neumark, David & Polsky, Daniel, 1997. "Job Stability in the United States," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 206-33, April. [Downloadable!] (restricted)
    Other versions:
  20. Daniel Aaronson & Kenneth Housinger, 1999. "The impact of technology on displacement and reemployment," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 14-30. [Downloadable!]
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