Risk of labor displacement and cross-industry labor mobility

A well-supported conclusion of previous research is that displacement entai ls large and persistent costs for workers. It therefore seems reasonable to expect workers to try to anticipate and respond to the risk of displacemen t. Using 1983-93 data from the Panel Survey of Income Dynamics and the Disp laced Workers Supplement to the Current Population Survey, the author inves tigates whether industry-specific measures of job loss risk are correlated with workers' propensity to cross industry lines for new jobs. She finds th at a one standard deviation increase in the risk of job loss tan 86% increa se from the mean level) increased the probability of inter-sectoral mobilit y by 10.5% in a sample of white men. Three factors that appreciably increas ed the likelihood of inter-sectoral mobility in response to job insecurity were voluntary separation from the previous job, high educational attainmen t, and being currently employed (as opposed to temporarily laid off).