| Has the Displacement of Older Workers Increased? |
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WP#2006-17 AbstractThe 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. For executive summary in PDF For full paper in PDF For related Issue in Brief Alicia H. Munnell is the Director of the Center for Retirement Research (CRR) and the Peter F. Drucker Professor of Management Sciences at Boston College’s Carroll School of Management. Steven Sass is the Associate Director for Research at the CRR. Mauricio Soto is an Economics graduate student at Boston College and a senior research associate at the Center. Natalia Zhivan is a graduate research assistant at the Center. The research reported herein was pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement Research Consortium (RRC). The findings and conclusions expressed are solely those of the authors and do not represent the views of SSA, any agency of the Federal Government, the RRC, or Boston College. The authors would like to thank Robert Hutchens for very useful comments and Madeline Zavodny for generously sharing her knowledge, experience, and files. They would also like to thank Francesca Golub-Sass and Jerilyn Libby for excellent research assistance and Kelly Haverstick for helping us untangle our equations.
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