Changing Consequences of Job Separation in the United States

Using the Panel Study of Income Dynamics, the author examines the consequences of job loss between the periods 1976–81 and 1986–91. He finds stability in the overall incidence of job separation, but a statistically significant increase in the incidence of involuntary job loss, relative to quits, for older workers. He also finds that the consequences of involuntary job loss worsened: the reemployment rate of workers who experienced involuntary job loss dropped from 67% in 1976–81 to 62% in 1986–91, and among those who found new jobs, the odds of receiving a large wage cut rose from 9% in 1976–81 to 17% in 1986–91.