LAID-OFF WORKERS IN A TIME OF STRUCTURAL-CHANGE

Labor markets have undergone considerable change in recent years. Manu facturing positions are shrinking, especially in blue-collar occupatio ns, and real wages for workers with little education are declining. A rising share of unemployment is accounted for by workers who have been permanently laid off. This article uses data on workers displaced fro m Massachusetts companies in the early 1990s who sought government-pro vided reemployment assistance to examine, first, their duration of une mployment and then, for those who found work, their new wages and othe r job attributes. The evidence shows that workers from declining indus tries suffer especially sharp wage cuts, and former defense workers ha ve the most severe adjustment costs of all. The research also shows th at early sign-up for adjustment services tends to reduce the duration of joblessness. However, laid-off workers who participate in education and training programs do not necessarily find better jobs than those who avail themselves only of more basic forms of assistance.