Trends in Severance Pay Coverage in the United States, 1980-2001
48 Pages Posted: 26 Jan 2006
Date Written: May 2004
Abstract
Major shocks to the labor market in the last two decades have raised concerns that workers, especially white-collar and service industry workers, have become increasingly vulnerable to costly job displacements. We construct annual estimates of private severance pay coverage for the last two decades, utilizing two Bureau of Labor Statistics data series - the Employee Benefits Surveys (EBS) and the Employment Cost Index (ECI) - to explore the implications of these changes on recent coverage trends. We find only modest evidence that employers have adjusted to this perception by expanding severance pay coverage. Although coverage has increased among administrative/professional workers in both the goods and service sectors and among clerical workers in the goods sector, it has declined among groups believed to be newly vulnerable to job displacement risk - workers in the service sector generally, and especially clerical/sales workers.
Keywords: Severance Pay, Job Displacement, Unemployment Insurance
JEL Classification: J65, J32, J33
Suggested Citation: Suggested Citation
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