Unequally Insecure: Rising Black/White Disparities in Job Displacement, 1981-2017

Authors:

Elizabeth Wrigley-Field, University of Minnesota
Nathan Seltzer, University of Wisconsin-Madison

Abstract:

Social scientists have documented vast racial disparities in labor market outcomes such as hiring and firing decisions, compensation, and opportunities for occupational advancement. Yet little is known about the racial patterning of job displacement (permanent involuntary layoffs), a remarkably common labor market outcome. Using data from the Displaced Worker Survey, covering nearly four decades of displacements, 1981-2017, we provide the first systematic analysis of Black/white displacement disparities since the 1990s. We find that Black workers were nearly always more likely to be displaced than whites, but the Black/white disparity has grown over time, with excess Black displacement doubling for women and tripling for men since the 1990s. Additionally, during the 1990s, being Black replaced lacking a college degree as the better predictor of displacement. To evaluate whether these disparities are explained by compositional differences—i.e. whether Black workers were more likely to be employed in displacement-prone jobs than whites—we decompose Black-white displacement disparities by job characteristics including occupation, industry, and public vs. private sector, and indexes reflecting displacement risk and job quality. The results support arguments that the public sector has become less protective for Black workers, but generally provide scant evidence that compositional differences explain the rise of racial disparities in displacement.