The measurement and interpretation of employment displacement

Three facets of worker displacement are investigated - definition, detection and consequence. A definition of displacement is sought that permits the identification of those who are truly at risk of adverse consequences because of this event. The detection goal is to identify data elements in available administrative data sources that can be used for this purpose. A consolidated database is used that represents three states in the US and seven industry sectors, which includes seven years of quarterly employer/industry affiliation and earnings pairings. Estimated earnings losses are shown to be sensitive to the definition of displacement that is adopted. Available data elements do not support the reliable prediction of adverse consequences associated with displacement relative to earnings discontinuities that accompany other causal definitions of unemployment.