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Back to Work: United States

Improving the Re-employment Prospects of Displaced Workers

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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 nine reports looking at how this challenge is being tackled in a number of OECD countries. It shows that the United States has a relatively high rate of job displacement and that only one in two affected workers find a new job within one year. Older displaced workers and those with a low level of education fare worst. Contrary to most other OECD countries, displaced workers have long been a target group for policy intervention, and a number of system features, like rapid response services, are promising. But the success of US policies is limited because overall funding for the workforce development system is insufficient and because only trade-related job displacement comes with generous entitlement for training and better benefits.

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Access to and adequacy of income support for displaced workers in the United States

This chapter examines the sources and adequacy of income support available for displaced workers in the United States, with focus on the post-2008 recession period. Initially, unemployment insurance plays a critical role for displaced workers to cushion income losses; insofar, the immediate and repeated extension of the relatively short duration of unemployment insurance payments was critical. However, not everyone claims such benefit and of those who do, many exhaust their entitlement. Many of those workers depend on means tested income support which is rather minimal in the United States by international standards. As a consequence, a large share of displaced workers touches poverty at some point at least during a short period.

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