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Economic Perspectives, Vol. 29, 2nd, 2005
Is Retraining Displaced Workers a Good Investment?

Studies have found that for many workers, job loss has a major long-term adverse impact on earnings. For example, in earlier research we found the earnings losses for high-seniority workers displaced from jobs in Pennsylvania during the early 1980s amounted to approximately 25 percent of their expected earnings even five years after job loss. The losses were larger for workers displaced in the Pittsburgh area and in other labor markets with substantial employment declines, for workers with many years of service with their former employer, and for workers whose former industries were declining.

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