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Job displacement: black and white workers compared
Lori G. Kletzer
Job displacement, caused by a variety of structural changes in the economy, is one of the dominant issues in contemporary U.S. labor market analysis. The labor market experience of displaced workers is a subject of considerable interest to economists, policymakers, and the general public. A number of research efforts have addressed questions concerning the size and composition of the group of displaced workers, the length of jobless periods, earnings upon reemployment, the usefulness of advance notification of plant closings, and losses of specific human capital.1 This article reports on one potentially troubling aspect of job displacement: racial differences in postdisplacement labor market outcomes.2 Using three surveys designed to identify displaced workers, the principal findings of this detailed examination of differences in postdisplacement experiences of whites and blacks are that:
The importance of studying black and white differences in displacement outcomes is suggested by the nature of changes in the economy since the late 1970's. Manufacturing has played an important role in advances in black economic status, and was a major source of employment for black workers by the late 1970's.3 These industries experienced substantial job losses during the early 1980's, and were slow to recover from the 1981-82 recession. Older industrial sectors in the Northeast and North Central regions of the country, where blacks had made significant labor force gains, were hit hard by the structural changes and recessions of the early 1980's. As the economy and labor market continue to respond to these changes, it is important to establish whether the burden is home disproportionately by minority workers.
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Footnotes
1 Previous research in this area includes: John T.
Addison and Pedro Portugal, "The Effect of Advance
Notification of Plant Closing on Unemployment," Industrial
and Labor Relations Review, October 1987, pp. 3-16; John T.
Addison and Pedro Portugal, "Job Displacement, Relative Wage
Changes, and Duration of Unemployment," Journal of Labor
Economics, July 1989, pp. 281-302; Richard M. Devens, Jr.,
"Displaced workers: one year later," Monthly Labor
Review, July 1986, pp. 40-43; Ronald G. Ehrenberg and George
Jakubson, Advance Notice Provisions in Plant Closing
Legislation (Kalamazoo, MI, W.E. Upjohn Institute for
Employment Research, 1988); Paul 0. Flaim and Ellen Sehgal,
"Displaced workers of 1979-83: how well have they
fared?" Monthly Labor Review, June 1985, pp. 316;
Daniel S. Hamermesh,"The Costs of Worker Displacement,"
Quarterly Journal of Economics, February 1987, pp. 51-76;
Daniel S. Hamermesh, "What Do We Know About Worker
Displacement in the U.S.'?" Industrial Relations, Winter
1989, pp. 51-59; Francis W. Horvath, "The pulse of economic
change: displaced workers of 1981-85," Monthly Labor
Review, June 1987, pp. 3-12; Lori G. Kletzer, "Returns
to Seniority After Permanent Job Loss , American Economic
Review, June 1989, pp. 536-43; Lori G. Kletzer,
"Earnings After Job Displacement: Job Tenure, Industry, and
Occupation," in J.T. Addison, ed., Job Displacement:
Consequences and Implications for Policy (Detroit, MI, Wayne
State University Press, 1991); Douglas L. Kruse,
"International Trade and the Labor Market Experience of
Displaced Workers," Industrial and Labor Relations
Review, April 1988, pp. 402-17; Janice F. Madden,
"Gender Differences in the Cost of Displacement: An
Empirical Test of Discrimination in the Labor Market," American
Economic Review, May 1987, pp. 246-51; Michael Podgursky and
Paul Swaim, "Job Displacement and Earnings Loss: Evidence
from the Displaced Worker Survey," Industrial and Labor
Relations Review, October 1987, pp. 17-29; Michael Podgursky
and Paul Swaim, "The Duration of Joblessness Following
Displacement," Industrial Relations, Fall 1987, pp.
213-26; Christopher J. Ruhm, "The Economic Consequences of
Labor Mobility," Industrial and Labor Relations Review, October
1987, pp. 30-49; Christopher J. Rubm, "Labor Market
Discrimination in the United States," in F.A. Blanchard and
F.J. Crosby, eds., Affirmative Action in Perspective (New York,
Springer-Verlag, 1989), pp. 149-58; and Paul Swaim and Michael
Podgursky, "Advance Notice and Job Search: The Value of an
Early Start," Journal of Human Resources, Spring
1990, pp. 147-78.
2 Most of the works listed in footnote I control for race in their empirical analysis and note race as an important factor in labor market adjustment following permanent job loss. In the case study literature on worker displacement, race has often been a theme. See H.L. Sheppard and J.L. Stem, "Impact of Automation on Workers in Supplier Plants," Labor Law Journal, October 1957, pp. 714-18; and M. Aiken, L.A. Ferman, and H.L. Sheppard, Economic Failure, Alienation, and Extremism (Ann Arbor, University of Michigan Press, 1968).
3 See J.J. Heckman and B.S. Payner, "Determining the Impact of Federal Antidiscrimination Policy on the Economic 'status of Blacks: A Study of South Carolina," American Economic Review, March 1989, pp. 138-77.
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