Academic journal article Monthly Labor Review

Which Layoffs-And Which Laid-Off Workers-Are in the Mass Layoff Statistics?

Academic journal article Monthly Labor Review

Which Layoffs-And Which Laid-Off Workers-Are in the Mass Layoff Statistics?

Article excerpt

Employers surveyed in the Mass Layoff Statistics (MLS) program are larger, pay higher wages, and have larger drops in employment than other employers with declining employment not surveyed in the MLS program; workers in the MLS are older, appear more likely to file for unemployment insurance, and appear to collect unemployment insurance over a longer period than the general population of recently unemployed workers

The Mass Layoff Statistics (MLS) program is a federal-state cooperative effort to collect data on major job cutbacks throughout the United States. In this program, representatives of state workforce agencies contact establishments with at least 50 claims for unemployment insurance (UI) filed against them during a consecutive 5-week period to determine whether these claims are associated with layoffs that will last at least 31 days. If so, the state agencies administer a short survey. This survey asks how many people were laid off in total, what the reason for the layoff was, and whether (and when) any recall of these workers is expected. These data, available since April 1995, are combined with administrative data on employers, such as their industry and location, as well as with data on the characteristics of their associated UI claimants, such as gender, age, and race, to form the MLS.

The MLS data are used for within-state allocations of federal funds for dislocated workers through the Economic Dislocation and Worker Adjustment Assistance Act. Academic researchers who study the impact of mass layoffs on workers have not used these data. Instead, researchers studying layoffs, such as Jacobson, LaLonde, and Sullivan; (1) Schoeni and Dardia; (2) Kodrzycki; (3) von Wachter and Handwerker; (4) Couch and Placzek; (5) and von Wachter, Song, and Manchester, (6) use administrative wage records to identify employers with at least 50 workers in some baseline period, followed by an employment decline of at least 30 percent, and consider these employment declines to be mass layoffs. All of these authors use administrative wage data--most often the employee-level earnings data from state UI systems--to trace the path of workers' earnings before and after mass layoffs and to calculate the cost of mass layoffs for the affected workers.

To describe the continuing impact of mass layoffs on workers in the United States, researchers would find it useful to be able to combine the total number of workers affected in such extended layoffs (a number the MLS program publishes quarterly) with estimates of the impacts of layoffs on each affected worker. However, to discuss both the extended mass layoffs counted by the MLS program and the impact of these layoffs measured by the academic literature, we need to establish whether these separate sources are describing the same layoffs and the same laid-off workers. Each source has a very different approach to defining a mass layoff--the MLS program uses the number of employees filing for UI (measured contemporaneously) and the academic research uses the size of permanent declines in employment (measured only in retrospect, using different size criteria, different data, and a different measure). These approaches could describe two different sets of employers with mass layoffs and two different sets of people laid off. This article describes the amount of overlap between the MLS employers and the employers identified with a similar method to the one used in the academic literature on mass layoffs. In particular, it shows how the MLS employers differ from the sets of employers whose employment level falls either by 50 workers (based on the MLS layoff size criteria) or by 30 percent or more (from an initial employment size of at least 50, using the academic layoff size criteria). This article also describes the separated workers of the MLS and compares this group of people with the broader population of recent job losers in the United States.

Method of comparing employers

To compare the MLS employers with the sets of employers who have large reductions in employment in the administrative wage records data, we begin with data assembled from the Quarterly Census of Employment and Wages (QCEW). …

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