Academic journal article Monthly Labor Review

The Industrial Structure of Job Displacement, 1979-89

Academic journal article Monthly Labor Review

The Industrial Structure of Job Displacement, 1979-89

Article excerpt

During the 1980's, the incidence of job displacement increased markedly in the services and retail trade sectors, in sharp contrast to earlier periods, when manufacturing industries were the primary source of this form of job loss

Data on displaced workers show that there were major shifts among industries in the relative incidence of job loss due to displacement during the 1980's. This article examines changing industrial patterns of job displacement over the decade, with special emphasis on the behavior of levels, shares, and rates of job displacements. Most intriguing are analytical results indicating a trend in the incidence of displacement away from manufacturing and toward service-producing industries. This resulted primarily from lower relative rates of displacement in manufacturing industries, and produced a much less concentrated industrial pattern of displacements by the end of the decade.

Displaced worker surveys

The Displaced Worker Surveys are special supplements to the monthly Current Population Survey, in which workers are asked: "In the past five years has [the respondent] lost or left a job because of a plant closing, an employer going out of business, a layoff from which [the respondent] was not recalled, or other similar reasons?" Workers responding affirmatively to this initial question are then asked a series of questions about their former jobs, postdisplacement labor market experiences, and, ifreemployed, current job characteristics. (1) The surveys were conducted in January of 1984, 1986, 1988, and 1990. Because each survey is retrospective over the preceding 5 years, the four surveys together cover the years 1979-89.

The sample of workers drawn from the surveys for this study was selected using criteria similar to those used by the Bureau of Labor Statistics in various articles and publications reporting data on job displacement. In particular, we include in our sample only those workers who reported job loss due to a plant shutdown or relocation, and workers who were laid off due to slack work or whose jobs were eliminated. There is, however, one major difference between our approach and that of the Bureau: Bureau tabulations exclude workers with less than 3 years of tenure on their former jobs, whereas we do not. Excluding workers with less than 3 years of tenure greatly reduces the sample and, hence, estimates of total displacements. Such an exclusion also affects the mix of displacements, because average tenure of displaced workers differs across industries. For example, average tenure of displaced workers is lower in most retail and service industries than in manufacturing and mining. Thus, the share of displacements accounted for by mining and manufacturing is smaller in our sample than in samples used for earlier Bureau studies. The advantage of our approach is that it gives us a much larger sample of displaced workers that allows us to conduct our analysis at a finer level of disaggregation. However, none of the major trends identified in this article depends on this tenure criterion.

Industrial composition of displacement

The focus of our examination of the industrial composition of displacements is on the number of displacements in any industry and the percentage share of any industry or group of industries in total displacements. Table 1 presents tabulations of displacements for broad industry groups, ranked by the levels of displacements in the groups for each survey. Before examining sectoral levels and shares of displacements, however, we should note the overall decline in total displacements across the four surveys. The overall level of displacements fell from 11.4 million in the 1984 survey to 10.8 million, 9.7 million, and 9.2 million in the next three surveys.(2) Thus, aggregate displacements fell by 20 percent over the period covered by the four surveys.

This aggregate decline was not the result of a uniform decline in displacements across all sectors. …

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