The Impact of Worker Displacement on Health: The Role of Economic Conditions, Education, and Age at Displacement

Jessica Pearlman, University of North Carolina at Chapel Hill

Over the past 30 years in the United States, the practice by companies of laying off workers to cut costs and improve profitability has become commonplace. This paper will specifically examine the impact of worker displacement on health in the United States. In addition, the paper will explore three topics that have not been previously researched in this area, the extent to which the impact of displacement on health varies according to 1) economic conditions in the year of displacement, 2) worker age at the time of displacement, 3) displaced worker education level. Findings from ordered probit and fixed effects models suggest that the negative impact of displacement on health is restricted to displaced workers with a college degree as well as those who are displaced when the unemployment rate is greater than 6.0 or who are displaced at ages 62 and older.