Cover: Wage Losses of Displaced Workers in the 1990s

Wage Losses of Displaced Workers in the 1990s

Published 1996

by Robert F. Schoeni, Michael Dardia

Download eBook for Free

FormatFile SizeNotes
PDF file 1.8 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

The large-scale downsizings of the 1990s have renewed interest in the wage losses of displaced workers. This study uses administrative data to follow 833,004 workers in California between 1989 and 1994, providing estimates of the extent of wage losses associated with the recent downsizings. Patterns of wage loss that are similar to those found in studies using different data for different regions and periods are documented. However, the authors do not find that wages decline substantially prior to displacement, which has been found in previous research. The study also finds that wage losses: i) vary substantially among workers; ii) differ by the period of displacement; iii) are related to the economic conditions at the time of displacement; iv) vary by firm size, industry of new employment, and the number of subsequent separations; v) are similar within versus across firms; and vi) in the long-run are 17 to 25 percent. The effects on quarterly versus hourly wages are also explored.

This report is part of the RAND draft series. The unrestricted draft was a product of RAND from 1993 to 2003 that represented preliminary or prepublication versions of other more formal RAND products for distribution to appropriate external audiences. The draft could be considered similar to an academic discussion paper. Although unrestricted drafts had been approved for circulation, they were not usually formally edited or peer reviewed.

This research in the public interest was supported by RAND, using discretionary funds made possible by the generosity of RAND's donors, the fees earned on client-funded research, and independent research and development (IR&D) funds provided by the Department of Defense.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.