Long-Run Wage and Earnings Losses of Displaced Workers

Displacement-related losses are estimated using NLSY79 data that span the years 1979-2000. The typical displaced worker faces losses of $34,065 during the period four years prior through five years following displacement. Proportionally, this represents a 10.8 percent loss compared to earnings of similar non-displaced workers over the period. Considerable variation in losses is reported across worker types. Union, male and more mature workers suffer greater losses, respectively, than do their non-union, female and younger counterparts. College graduates and high school dropouts are found to suffer lower losses compared to high school diploma holders and those who completed some college.