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This study documents the use of four adjustment strategies by Canadian workers permanently laid off in 2009 - in the middle of the last recession: moving to another region, enrolling in post-secondary education, signing up for a registered apprenticeship and becoming self-employed. The authors examine whether the adoption of strategies varied according to workers' characteristics and their employment status a year after job loss, and to what extent it differed in the short and long terms. Looking at adjustment patterns in the first and fifth years after job loss, the authors find that, overall, only a minority of displaced workers - at most one in five - adopted at least one of these strategies. The use of adjustment strategies varied considerably depending on gender, age, education and other characteristics.

Documenting and quantifying the adoption of various adjustment strategies is a first step in improving understanding of workers' behaviour after job loss. Each strategy has pros and cons to be considered. And identifying the predominant strategies can shed light on the wide array of incentives and barriers people face when responding to job loss, especially when employment options are scarce. In the postpandemic world, the findings of this study will be especially relevant for informing the development of policies to support displaced workers.

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How quickly do men and women find work after mass lay-offs due to workplace closures? This research reveals that women face a greater risk of unemployment than men and lose a larger share of their earnings. More of this gender gap is due to the unequal division of childcare responsibilities than to differences in education or seniority at work.

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This report investigates the factors associated with the intensity of 'mass lay-offs' across countries and industries, controlling for the dynamics of overall employment. The results suggest that some important drivers of structural transformation (e.g. digitalisation and globalisation) are not as clearly linked to mass lay-offs as one might expect, once their impact on overall job destruction is accounted for. The report also investigates the re-employability prospects of workers in sectors at high risk of mass lay-offs. Finally, the paper draws implications for different areas of policymaking, from labour market policy to industrial policy and also trade policy.

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Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is the fourth in a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that Sweden has been relatively successful in minimising the adverse effects of displaced workers, mainly due to the longstanding tradition of collaboration between the social partners to share responsibility for restructuring by creating special arrangements and practices that provide help to workers much faster than in other OECD countries. Despite this positive institutional framework, there is room to improve policies targeted to displaced workers as remarkable inequalities still exist in both the Swedish labour market and in the way workers are treated.

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Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is part of a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that in New Zealand most displaced workers find a new job again, largely due to a strong economy and a highly flexible labour market. But many of them face large losses in terms of job quality and especially wages. And displaced workers facing difficulties in New Zealand are largely left on their own to find a new job, as the means-tested public benefit system only provides for people in need and employment services concentrate on helping people off benefit with limited focus on those not receiving a benefit.

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Nine countries are participating in the review: Australia; Canada; Denmark; Finland; Japan; Korea; New Zealand; Sweden; and USA. The chapters are as follows: Job displacement in New Zealand and its consequences; Easing the impact of economic restructuring on displaced workers in New Zealand; Re-employment support for displaced workers in New Zealand who struggle to find a new job. Show less

This report summarises the results of a cross-country study of job displacement over the past decade, covering Australia, Canada, Denmark, Finland, France, Germany, Japan, Korea, New Zealand, Portugal, the Russian Federation, Sweden, the United Kingdom and the United States. It attempts to fill some of the gaps in the existing literature by using a comparable methodology to examine job displacement and its consequences in these countries. Job displacement, that is involuntary job loss due to economic factors such as economic downturns or structural change, is highly cyclical but has not exhibited any upwards trend over the past decade. Differences in available data sources and definitions make cross-country comparisons difficult, but it appears that displacement affects around 2-7 per cent of employees every year in the countries for which data are available. The report is organised as follows. Section one discusses the definitions and data sources used in the report, as well as their limitations. Section two presents estimates of the incidence of job displacement as well as identifies the types of workers most likely to be affected. Section three discusses the re-employment prospects of displaced workers. Section four examines the impact of job displacement on earnings, hours and working arrangements. Section five presents a detailed examination of skill-use by displaced workers before and after displacement, and the links between skills and post-displacement wage losses. The implications of the findings for policy makers are discussed in the conclusions of the report.

Findings include: some workers have a greater risk of job displacement and are more likely to experience poor post-displacement outcomes than others; in most of the countries examined, older workers and those with low education levels have a higher displacement risk, take longer to get back into work and suffer greater (and more persistent) earnings losses; while youth also have a higher risk of displacement than prime-aged workers, they fare better afterwards; young workers generally find work relatively quickly after displacement, often in jobs with greater skill requirements than their previous jobs; women are generally no more likely to be displaced than men, once other factors such as the type of contract they hold before displacement are taken into account, however, women are more likely than men to become disconnected from the labour market and experience longer spells of inactivity after displacement; the extent of earnings losses after displacement varies substantially across countries; as well as lower earnings, re-employed displaced workers are more likely to work in part-time or non-permanent jobs than prior to displacement, and work shorter hours on average; and changes in skill use after displacement explain some, but not all, of the earnings losses experienced by displaced workers.

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Workers who find themselves unemployed face many decisions. Maintenance of food, shelter, and family structure are usually basic considerations which direct the energies of displaced workers. In most cases the perceived need to find other employment is paramount. However, obtaining employment is difficult for most displaced workers, and usually means a substantial reduction in earnings. Training would help increase their employment opportunities and earning potential. These factors would appear to support adult education and training programs as viable means to becoming reemployed. The purpose of this study was to identify the factors affecting displaced workers' participation in adult education and training programs.

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Combining the longitudinal dimension and the retrospective calendar of the French Labour Force Survey (2003-2011), [the author analyses] the labour market transitions and outcomes of workers who were dismissed for economic reasons. This study analyses the re-employment patterns of displaced workers and their earnings losses, as is common in the literature, as well as the consequences of displacement for other aspects of job quality. Results suggest that the cost of involuntary job loss is important and goes beyond the fall in earnings. Workers who are made redundant face relatively long spells of nonemployment before getting back to work and their new jobs tend to be of lower quality than their predisplacement jobs along a number dimensions. Re-employed displaced workers suffer a monthly wage penalty of 15-20 per cent and are, on average, nine times as likely to lose their job again as are workers who have not been made redundant. In addition, displaced workers are more likely to work part-time once re-employed, and to have fewer paid holidays and lower job authority than had they not been dismissed, though these differences tend to fall over time.

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Because of their long job tenure and sector-specific skills that often are not easily transferable to other jobs, some older workers in Canada who suddenly find themselves laid off face considerable obstacles to re-employment. They may resort to early retirement as a second choice, rather than accept a lower-paying job. But such hastened retirement will further slow labour force growth, which is already beginning to wane due to population aging, thus reducing economic growth and putting additional stress on public and private pension plans. [The authors] investigate the sources of income and the labour market choices of long-tenured older workers in the five years following layoff, and find that a surprisingly large number choose to or are forced to retire due to poor re-employment prospects. Among those aged 45 to 59 (who are not eligible for Canada Pension Plan benefits), about one-quarter have 'retired' within five years, in the sense that they rely on pensions as their primary source of income. This proportion rises to nearly 70 per cent in the 60 to 64 age group.

Older laid-off workers (aged 45 to 64) who manage to find new jobs lose about 40 per cent of their earnings relative to what they earned in their previous jobs, significantly more than do those aged under 45. Those under 45 are much more likely to find re-employment at or above their previous earnings, and those who initially experience earnings losses typically see their earnings grow steadily thereafter. Older workers, in contrast, rarely succeed in matching their previous earnings upon re-employment, nor do their earnings grow appreciably in subsequent years. Given the poor track record of existing adjustment policies for assisting older laid-off workers, such as training and short-term income maintenance, the authors argue that wage insurance could be an effective option. Such a program would subsidize a proportion of the wage losses suffered by an older unemployed worker for a fixed period upon re-employment. To be effective, it should be coupled with intensive job search assistance that encourages workers to look further afield than their previous industry and occupation. If implemented properly, wage insurance would enable many older workers, who might otherwise leave the labour force, to earn acceptable wages and gain new occupational and industry experience, thus partly offsetting the negative effect of population aging on Canada's prospects for long-term economic growth.

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It is too early to know how many Canadian workers will lose their job, i.e. will be permanently laid-off, as a result of the [Coronavirus Disease 2019] COVID-19 pandemic and what will happen to them financially after job loss. Yet a number of stylized facts emerge from the past. While these facts do not necessarily allow accurate predictions of the impact of the pandemic on job displacement, they provide a long-term perspective from which forthcoming labour market developments can be assessed. The goal of this article is to highlight these facts.

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