Louis Jacobson

The Impact of Community College Retraining on Older Displaced Workers: Should We Teach Old Dogs New Tricks?:

The authors estimate the returns to retraining for older displaced workers—those 35 or older—by estimating the impact of community college schooling on earnings. The analysis relies on longitudinal administrative records covering workers displaced from jobs in Washington State during the early 1990s. The authors find that older displaced workers participated in community college schooling at lower rates than younger workers. Among those who participated, however, the impact on quarterly earnings was similar across the two age groups. One academic year of community college schooling is estimated to have increased long-term earnings by about 7% for older men and by about 10% for older women. Although these percentages are consistent with those reported in the schooling literature, estimates of the social internal rates of return from this retraining may differ substantially among older and younger workers because of differences in their work lives and their opportunity costs of retraining.

A Tale of Employment Decline in Two Cities: How Bad Was the Worst of Times?.

This paper describes the communitywide effects on employment, earnings, and labor mobility of the severe employment declines that occurred in major industries in the Buffalo, New York and Providence, Rhode Island SMSAs in the period 1960 – 70. The author analyzes the work histories, drawn from longitudinal Social Security Administration data files, of about 20,000 men with job experience in those years and SMSAs. A major finding is that voluntary separations exceeded employment reductions in nearly all industries, indicating that, contrary to popular belief, relatively few workers in those cities were forced out of their jobs. In addition, the workers studied were very mobile; about one-third of job changers migrated out of their original SMSA, and many changers moved into different industries. Some workers who lost their jobs suffered severe earnings loss, but the total earnings loss was not particularly large. The author discusses the policy implications of those findings.

Book Review: Economic and Social Security and Substandard Working Conditions: Unemployment: Short-Time Compensation: A Formula for Work SharingShort-time Compensation: A Formula for Work Sharing. Edited by MaCoyRamelle and MorandMartin J., Elmsford, N.Y.: Pergamon, 1984. xvi, 223 pp.

The idea of expanding unemploymnent insurance eligibility to workers on short hours has generated considerable interest. Several states have tested this idea, presumably because they believe that such plans lower the unemployment rate, reduce unnecessary turnover, and distribute the costs of cyclical declines more equitably than the present system. The volume edited by MaCoy and Morand captures the excitement of introducing a new idea to solve an old problem. Many of the pieces were written by individuals deeply involved in establishing the state programs. As a result, the volume provides considerable insight into the variety of ways governments respond to new information, and strategies that can successfully encourage adoption of promising innovations. Unfortunately, the volume tends to have the tone of a panegyric. The writers seem so committed to the idea that they feel little need to carefully analyze the costs and benefits of the program. This is a serious omission. First, there are potential drawbacks to the program. The programn can reduce earnings and productivity by delaying adjustment to structural change, and increase unemployment by subsidizing cyclical industries at the expense of noncyclical industries. Second, careful analysis would help convince skeptics that the benefits of the programn outweigh the costs. The lack of in-depth analysis is particularly disappointing because the idea may have considerable merit.