Do Long-Tenure Workers have Special Problems Following Job Displacement?

Abstract

This article examines whether the adjustment problems that follow job displacement become more severe as preseparation tenure increases. Recent research using nationally representative samples generally finds that the independent effect of seniority is quite weak and is dwarfed by other factors such as ethnicity, gender, or regional economic conditions. There is some evidence that persons with very high seniority (over 20 years) suffer larger wage losses than do other workers and that they might also be expected to lose pension benefits under defined benefit plans. The findings provide no justification for the Bureau of Labor Statistics's narrow definition of displaced workers, which includes only persons with more than three years' seniority on preseparation employment.