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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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Programmes promoting the re-employment of displaced workers in the United States

This chapter provides an assessment of the employment and training programmes available in the United States to help displaced workers back to employment. The US policy approach is unique in singling out displaced workers for help. Targeting services can be very effective but there is too little money in the system to help everyone who needs help and training supply in particular falls short of demand. The chapter also discusses the distinction made in the US system between trade related displacement and other job displacement, with the former group being entitled to a much larger array of services and benefits than other displaced or unemployed workers.

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