Revisiting Union Wage and Job Loss Effects Using the Displaced Worker Surveys

Estimates of union wage effects have been challenged by concerns regarding unobserved worker heterogeneity and endogenous job changes. Many economists believe that union wage premiums lead to business failures and other forms of worker displacement. In this article, the authors examine displacement rates and union wage gaps using the 1994–2018 biennial Displaced Worker Survey (DWS) supplements to the monthly Current Population Surveys. For more than two decades, displacement rates among union and non-union workers have been remarkably similar. The authors observe changes in earnings resulting from transitions between union and non-union jobs following exogenous job changes. Consistent with prior evidence from the 1994 and 1996 DWS, findings show longitudinal estimates of average union wage effects close to 15%, which are similar to standard cross-section estimates and suggestive of minimal ability bias. Wage losses moving from union to non-union jobs exceed gains from non-union to union transitions.

Information technology and employment: The impact of job tasks and worker skills

This study examines worker displacement from the job task framework in which tasks performed by workers interact with information technology in different ways and therefore can potentially lead to worker displacement. It also investigates what kinds of skills are more helpful for reemployment in today's increasingly computerized workplaces. It utilizes seven US displaced worker supplement surveys from 1998 to 2010 to investigate these issues at individual worker level. The results show that employees performing routine tasks at workplaces are more likely to be displaced, while those performing abstract and service tasks are less likely to be displaced. It also finds that information technology can be both upskilling and deskilling, depending on the kinds of jobs performed by workers.

Job Ladders and Earnings of Displaced Workers

Workers who suffer job displacement experience surprisingly large and persistent earnings losses. This paper proposes an explanation for this robust empirical puzzle in a model of search with a significant job ladder and increased separation rates for the recently hired. In addition to capturing the depth and persistence of displaced worker earnings losses, the model matches: employment-to-nonemployment and employer-to-employer probabilities by tenure; the empirical decomposition of earnings losses into reduced wages and employment; observed wage dispersion; and the distribution of wage changes around a nonemployment event. (JEL J31, J63, J64)