Has the Displacement of Older Workers Increased?

Alicia Munnell, Steven Sass (), Mauricio Soto () and Natalia Zhivan ()
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Steven Sass: Center for Retirement Research, Boston College
Authors registered in the RePEc Author Service: Steven A. Sass () and Steven A. Sass ()

Working Papers, Center for Retirement Research at Boston College from Center for Retirement Research

Abstract: The 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.

Keywords: older workers; displacement; retirement; saving plans; job loss; tenure; education; re-employment; earnings loss (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-lab
Date: 2006-09, Revised 2006-09
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