What Do We Know About Worker Displacement in the U.S.?

Each year during the eighties, plant closings in the U.S. displaced roughly one‐half million workers with three‐plus years on the job. The recent data and empirical research reviewed here show that wage cuts lower only slightly the probability that a plant will close. Average earnings losses due to long spells of unemployment and to subsequent reduced wages are substantial. Minorities suffer an above‐average rate of displacement, but their earnings losses are not unusually high. Women and older workers are no more likely than others to become displaced or to suffer greater earnings losses, but high‐tenure workers lose more.