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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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Early intervention and prevention of job displacement in the United States

This chapter analyses the most important policy measures in the United States that take effect before workers are dismissed and aim to prevent excessive job displacements. This is done by looking at the role of employment protection legislation which determines the process through which employers can dismiss workers, short-time work and layoff aversion strategies. The chapter also looks into rapid response transition services aimed at connecting displaced workers to employment support to help them find new jobs quickly.

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