Job loss is an involuntary disruptive life event with a far-reaching impact on workers' life trajectories. Its incidence among growing segments of the workforce, alongside the recent era of severe economic upheaval, has increased attention to the effects of job loss and unemployment. As a relatively exogenous labor market shock, the study of displacement enables robust estimates of associations between socioeconomic circumstances and life outcomes. Research suggests that displacement is associated with subsequent unemployment, long-term earnings losses, and lower job quality; declines in psychological and physical well-being; loss of psychosocial assets; social withdrawal; family disruption; and lower levels of children's attainment and well-being. Although reemployment mitigates some of the negative effects of job loss, it does not eliminate them. Contexts of widespread unemployment, although associated with larger economic losses, lessen the social-psychological impact of job loss. Future research should attend more fully to how the economic and social-psychological effects of displacement intersect and extend beyond displaced workers themselves.


Article metrics loading...

Loading full text...

Full text loading...


Literature Cited

  1. Ananat EO, Gassman-Pines A, Gibson-Davis CM. 2011. The effects of local employment losses on children's educational achievement. Whither Opportunity: Rising Inequality, Schools, and Children's Life Chances GJ Duncan, RJ Murnane 299–313 New York: Sage [Google Scholar]
  2. Attewell P. 1999. The impact of family on job displacement and recovery. Ann. Am. Acad. Polit. Soc. Sci. 562:66–82 [Google Scholar]
  3. Baumol WJ, Blinder AS, Wolff EN. 2003. Downsizing in America: Reality, Causes, and Consequences New York: Sage
  4. Brand JE. 2004. Enduring effects of job displacement on career outcomes Doctoral Dissertation, Univ. Wisc., Madison
  5. Brand JE. 2006. The effects of job displacement on job quality: findings from the Wisconsin Longitudinal Study. Res. Soc. Stratif. Mobil. 24:275–98 [Google Scholar]
  6. Brand JE, Burgard SA. 2008. Job displacement and social participation over the life course: findings for a cohort of joiners. Soc. Forces 87:1211–42 [Google Scholar]
  7. Brand JE, Levy B, Gallo WT. 2008. Effects of layoffs and plant closings on depression among older workers. Res. Aging 30:6701–21 [Google Scholar]
  8. Brand JE, Simon Thomas J. 2014. Job displacement among single mothers: effects on children's outcomes in young adulthood. Am. J. Sociol. 119:4955–1001 [Google Scholar]
  9. Brand JE, von Wachter T. 2013. The economic and social consequences of job loss and unemployment. Population Reference Bureau (PRB) Webinar. http://www.prb.org/Multimedia/Video/2013/job-loss-webinar.aspx [Google Scholar]
  10. Burgard SA, Brand JE, House JS. 2007. Toward a better estimation of the effect of job loss on health. J. Health Soc. Behav. 48:369–84 [Google Scholar]
  11. Burgard SA, Brand JE, House JS. 2009. Perceived job insecurity and worker health in the United States. Soc. Sci. Med. 69:777–85 [Google Scholar]
  12. Carrington W, Zaman A. 1994. Interindustry variation in the costs of job displacement. J. Labor Econ. 12:243–75 [Google Scholar]
  13. Catalano R, Goldman-Mellow S, Saxton K, Margerison-Zilko C, Subbaraman M. et al. 2011. The health effects of economic decline. Annu. Rev. Public Health 32:431–50 [Google Scholar]
  14. Cha Y, Morgan S. 2010. Structural earnings losses and between-industry mobility of displaced workers, 2003–2008. Soc. Sci. Res. 39:1137–52 [Google Scholar]
  15. Chan S, Stevens AH. 1999. Employment and retirement following a late career job loss. Am. Econ. Rev. 89:2211–16 [Google Scholar]
  16. Chan S, Stevens AH. 2001. Job loss and employment patterns of older workers. J. Labor Econ. 19:484–521 [Google Scholar]
  17. Charles KK, Stephens M Jr. 2004. Job displacement, disability, and divorce. J. Labor Econ. 22:489–522 [Google Scholar]
  18. Clark A. 2003. Unemployment as a social norm: psychological evidence from panel data. J. Labor Econ. 21:2323–51 [Google Scholar]
  19. Clark A. 2010. Boon or bane? Others' unemployment, well-being and job insecurity. Labor Econ. 17:52–61 [Google Scholar]
  20. Clark AE, Georgellis Y, Sanfey P. 2001. Scarring: the psychological impact of past unemployment. Economica 68:221–41 [Google Scholar]
  21. Coelli M. 2011. Parental job loss and the education enrollment of youth. Labor Econ. 18:25–35 [Google Scholar]
  22. Couch KA, Jolly NA, Placzek DW. 2011. Earnings losses of displaced workers and the business cycle: an analysis with administrative data. Econ. Lett. 111:16–19 [Google Scholar]
  23. Couch KA, Placzek DA. 2010. Earning losses of displaced workers revisited. Am. Econ. Rev. 100:1572–89 [Google Scholar]
  24. Darity W. Goldsmith AH. Jr, 1996. Social psychology, unemployment, and macroeconomics. J. Econ. Perspect. 10:1121–40 [Google Scholar]
  25. Davis S, von Wachter T. 2012. Recessions and the cost of job loss. Brook. Pap. Econ. Act. 43:1–72 [Google Scholar]
  26. Dooley D, Fielding J, Levi L. 1996. Health and unemployment. Annu. Rev. Public Health 17:449–65 [Google Scholar]
  27. Dooley D, Prause J, Ham-Rowbottom KA. 2000. Underemployment and depression: longitudinal relationships. J. Health Soc. Behav. 41:421–36 [Google Scholar]
  28. Durkheim E. 1933. Division of Labor in Society New York: Free Press
  29. Eliason M, Storrie D. 2009. Does job loss shorten life?. J. Hum. Resour. 44:2277–302 [Google Scholar]
  30. Fallick B. 1996. A review of the recent empirical literature on displaced workers. Ind. Labor Relat. Rev. 50:5–16 [Google Scholar]
  31. Farber HS. 1993. The incidence and costs of job loss: 1982–91. Brook. Pap. Econ. Act. Microecon. 1:73–119 [Google Scholar]
  32. Farber HS. 1997. The changing face of job loss in the United States, 1981–1995. Brook. Pap. Econ. Act. Microecon. 1997:55–142 [Google Scholar]
  33. Farber HS. 2003. Job Loss in the United States, 1981–2001 Work. Pap. 9707, Natl. Bur. Econ. Res.
  34. Farber HS. 2005. What do we know about job loss in the United States? Evidence from the Displaced Workers Survey, 1984–2004. Econ. Perspect. 29(2):13–28 [Google Scholar]
  35. Farber HS. 2010. Job loss and the decline in job security in the United States. Labor in the New Economy KG Abraham, JR Spletzer, MJ Harper 223–62 Chicago: Univ. Chicago Press [Google Scholar]
  36. Farley R. 1996. The New American Reality: Who We Are, How We Got Here, Where We Are Going New York: Sage
  37. Ferrie JE, Shipley MJ, Marmot MG, Stansfield SA, Smith GD. 1998. An uncertain future: the health effects of threats in employment security in white-collar men and women. Am. J. Public Health 88:1030–36 [Google Scholar]
  38. Gallo WT, Bradley EH, Alba TA, Dubin JA, Cramer LD. et al. 2004. Involuntary job loss as a risk factor for subsequent myocardial infarction and stroke: findings from the Health and Retirement Survey. Am. J. Ind. Med. 45:408–16 [Google Scholar]
  39. Gallo WT, Bradley EH, Dubin JA, Jones RN, Flaba TA. et al. 2006a. The persistence of depressive symptoms in older workers who experience involuntary job loss: results from the Health and Retirement Survey. J. Gerontol. B 55:S131–40 [Google Scholar]
  40. Gallo WT, Bradley EH, Siegel M, Kasl SV. 2000. Health effects of involuntary job loss among older workers: findings from the Health and Retirement Study. J. Gerontol. B 55:S131–40 [Google Scholar]
  41. Gallo WT, Brand JE, Teng H-M, Leo-Summers L, Byers AL. 2009. Differential impact of involuntary job loss among older workers: Does predisposition matter?. Res. Aging 31:3345–60 [Google Scholar]
  42. Gallo WT, Teng H-M, Falba TA, Kasl SV, Krumholz HM, Bradley EH. 2006b. The impact of late career job loss on myocardial infarction and stroke: a 10 year follow up using the Health and Retirement Survey. Occup. Environ. Med. 63:683–87 [Google Scholar]
  43. Gibbons R, Katz LF. 1991. Layoffs and lemons. J. Labor Econ. 9:351–80 [Google Scholar]
  44. Hamilton VL, Broman CL, Hoffman WS, Renner DS. 1990. Hard times and vulnerable people: initial effects of plant closing on autoworkers' mental health. J. Health Soc. Behav. 31:123–40 [Google Scholar]
  45. Hollister M. 2011. Employment stability in the U.S. labor market: rhetoric versus reality. Annu. Rev. Sociol. 37:305–24 [Google Scholar]
  46. Hout M, Levanon A, Cumberworth E. 2011. Job loss and unemployment. The Great Recession D Grusky, B Western, C Wimer 59–81 New York: Sage [Google Scholar]
  47. Jacobson LS, LaLonde RJ, Sullivan DG. 1993. Earnings losses of displaced workers. Am. Econ. Rev. 83:685–709 [Google Scholar]
  48. Jahoda M. 1981. Work, employment, and unemployment: values, theories, and approaches in social research. Am. Psychol. 36:184–91 [Google Scholar]
  49. Jahoda M. 1982. Employment and Unemployment: A Social-Psychological Analysis Cambridge, UK: Cambridge Univ. Press
  50. Jahoda M, Lazarsfeld PF, Zeisel H. 1971 (1933). Marienthal: The Sociography of an Unemployed Community London: Tavistock
  51. Johnson RC, Kalil A, Dunifon RE. 2012. Employment patterns of less-skilled workers: links to children's behavior and academic progress. Demography 49:747–72 [Google Scholar]
  52. Kalil A, Wightman P. 2011. Parental job loss and children's educational attainment in Black and White middle-class families. Soc. Sci. Q. 92:157–78 [Google Scholar]
  53. Kalil A, Ziol-Guest KM. 2005. Single mothers' employment dynamics and adolescent well-being. Child Dev. 76:10196–211 [Google Scholar]
  54. Kalil A, Ziol-Guest KM. 2008. Parental employment circumstances and children's academic progress. Soc. Sci. Res. 37:500–15 [Google Scholar]
  55. Kalleberg AL. 2000. Changing contexts of careers: trends in labor market structures and some implications for labor force outcomes. Generating Social Stratification: Toward a New Research Agenda AC Kerckhoff 343–58 Boulder, CO: Westview [Google Scholar]
  56. Kalleberg AL. 2009. Precarious work, insecure workers: employment relations in transition. Am. Sociol. Rev. 74:11–22 [Google Scholar]
  57. Kasl SV, Jones B. 2000. The impact of job loss and retirement on health. Social Epidemiology L Berkman, I Kawachi 118–36 Oxford, UK: Oxford Univ. Press [Google Scholar]
  58. Katz L. 2010. Long-term unemployment in the Great Recession Hearing on “Long-Term Unemployment: Causes, Consequences and Solutions.”. Testimony for the Joint Economic Committee U.S. Congress, April 29
  59. Kessler RC, House JS, Turner JB. 1987. Unemployment and health in a community sample. J. Health Soc. Behav. 28:51–59 [Google Scholar]
  60. Kessler RC, Turner JB, House JS. 1988. Effects of unemployment on health in a community survey: main, modifying, and mediating effects. J. Soc. Issues 44:69–85 [Google Scholar]
  61. Kessler RC, Turner JB, House JS. 1989. Unemployment, reemployment, and emotional functioning in a community sample. Am. Sociol. Rev. 54:648–57 [Google Scholar]
  62. Kletzer LG. 1998. Job displacement. J. Econ. Perspect. 12:115–36 [Google Scholar]
  63. Krashinsky H. 2002. Evidence on adverse selection and establishment size in the labor market. Ind. Labor Relat. Rev. 56:184–96 [Google Scholar]
  64. Leana CR, Feldman DC. 1988. Individual responses to job loss: perceptions, reactions, and coping behaviors. J. Manag. 14:375–89 [Google Scholar]
  65. Leana CR, Feldman DC. 1992. Coping with Job Loss: How Individuals, Organizations, and Communities Respond to Layoffs New York: Lexington
  66. Logan J. 1996. Opportunity and choice in socially structured labor markets. Am. J. Sociol. 102:1114–60 [Google Scholar]
  67. McKee-Ryan F, Song Z, Wanberg CR, Kinicki AJ. 2005. Psychological and physical well-being during unemployment: a meta analytic study. J. Appl. Psychol. 90:153–76 [Google Scholar]
  68. McLoyd VC. 1990. The impact of economic hardship on black families and children: psychological distress, parenting, and socioemotional development. Child Dev. 61:2311–46 [Google Scholar]
  69. McLoyd VC, Jayaratne TE, Ceballo R, Borquez J. 1994. Unemployment and work interruption among African American single mothers: effects on parenting and socioeconomic functioning. Child Dev. 65:562–89 [Google Scholar]
  70. Miller MV, Hoppe SK. 1994. Attributions for job termination and psychological distress. Hum. Relat. 47:307–27 [Google Scholar]
  71. Morgan SL, Winship C. 2014. Counterfactuals and Causal Inference: Methods and Principles for Social Research Cambridge, UK: Cambridge Univ. Press
  72. Newman KS. 1988. Falling from Grace: The Experience of Downward Mobility in the American Middle Class New York: Vintage Books
  73. Oreopoulos P, Page ME, Stevens AH. 2008. The intergenerational effects of worker displacement. J. Labor Econ. 6:3455–83 [Google Scholar]
  74. Page M, Stevens AH, Lindo J. 2009. Parental income shocks and outcomes of disadvantaged youth in the United States. The Problems of Disadvantaged Youth: An Economic Perspective J Gruber 213–36 Chicago: Univ. Chicago Press [Google Scholar]
  75. Paul KI, Moser K. 2009. Unemployment impairs mental health: meta-analyses. J. Vocat. Behav. 74:264–82 [Google Scholar]
  76. Pearlin LI, Lieberman MA, Menaghan EG, Mullan JT. 1981. The stress process. J. Health Soc. Behav. 22:337–56 [Google Scholar]
  77. Podgursky M, Swaim P. 1987. Job displacement and earnings loss: evidence from the Displaced Worker Survey. Ind. Labor Relat. Rev. 41:17–29 [Google Scholar]
  78. Putnam RD. 2000. Bowling Alone: The Collapse and Revival of American Community New York: Simon & Schuster
  79. Rege M, Telle K, Votruba M. 2011. Parental job loss and children's school performance. Rev. Econ. Stud. 78:1462–89 [Google Scholar]
  80. Rotolo T, Wilson J. 2003. Work histories and voluntary association memberships. Sociol. Forum 18:4603–19 [Google Scholar]
  81. Ruhm CJ. 1991. Are workers permanently scarred by job displacement?. Am. Econ. Rev. 81:319–24 [Google Scholar]
  82. Seitchik A. 1991. Who are displaced workers?. Job Displacement: Consequences and Implications for Policy JT Addison 51–82 Detroit, MI: Wayne State Univ. Press [Google Scholar]
  83. Stevens AH. 1997. Persistent effects of job displacement: the importance of multiple job losses. J. Labor Econ. 15:1165–88 [Google Scholar]
  84. Stevens AH. 2014. Labor market shocks: Are there lessons for antipoverty policy?. Pathways Summer 2014:20–22 [Google Scholar]
  85. Stevens AH, Schaller J. 2011. Short-run effects of parental job loss on children's academic achievement. Econ. Educ. Rev. 30:2289–99 [Google Scholar]
  86. Strully KW. 2009. Job loss and health in the U.S. labor market. Demography 46:2221–46 [Google Scholar]
  87. Sullivan D, von Wachter T. 2009. Job displacement and mortality: an analysis using administrative data. Q. J. Econ. 124:1265–306 [Google Scholar]
  88. Turner JB. 1995. Economic context and the health effects of unemployment. J. Health Soc. Behav. 36:213–29 [Google Scholar]
  89. von Wachter T. 2010. Hearing on “Long-Term Unemployment: Causes, Consequences and Solutions.”. Testimony Before the Joint Economic Committee U.S. Congress, April 29
  90. Warr P, Jackson P. 1985. Factors influencing the psychological impact of prolonged unemployment and of re-employment. Psychol. Med. 15:795–807 [Google Scholar]
  91. Wetzel JR. 1995. Labor force, unemployment and earnings. State of the Union: America in the 1990s, Volume 1: Economic Trends R Farley 59–105 New York: Sage [Google Scholar]
  92. Wilensky H. 1961. Orderly careers and social participation: the impact of work history on social integration in the middle mass. Am. Sociol. Rev. 26:4521–39 [Google Scholar]
  93. Wilson J. 2000. Volunteering. Annu. Rev. Sociol. 26:215–40 [Google Scholar]
  94. Wilson J, Musick MA. 1997. Work and volunteering: the long arm of the job. Soc. Forces 76:1251–72 [Google Scholar]
  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error