The effects of job displacement on job quality: Findings from the Wisconsin Longitudinal Study

This study examines the extent to which job displacement divides the career experiences for a cohort of workers. Previous studies of job displacement find nontrivial economic losses for displaced workers, but the effects of displacement on “non-economic” properties of jobs have been largely overlooked. Results using the Wisconsin Longitudinal Study indicate that workers who were displaced have lower levels of occupational status, job authority, and employer-offered pension and health insurance than they would have had had they not been displaced. Difference-in-differences estimates, which control for temporally-invariant unobserved heterogeneity, are generally larger than cross-sectional estimates; still, there is a close correspondence of estimates across a range of methodological approaches attesting to the robustness of the estimates in the face of various technical assumptions and model specifications. Effects of displacement on job quality also exhibit conditioning by gender, education, occupation, and industry: while less educated, blue collar and manufacturing workers experience significant losses for employer-offered benefits, more educated, upper white collar and non-manufacturing workers experience significant losses for occupational status, job autonomy, and job authority.