Volume 7, Number 1 (Winter) 1972
Stern, James L. 1972. "Consequences of Plant Closure." Journal of Human Resources 7(1):3-25.
Pre- and post-shutdown annual earnings reported to the Social Security Administration are used to measure the economic impact of plant closure on the income of workers exercising different vocational choices. Workers who sought new jobs in the local labor market suffered substantial reductions in post-shutdown annual earnings. With the influence of age, skill, sex, seniority, education, race, and pre-shutdown earnings held constant, short-term training did not improve the situation significantly. Workers who elected the interplant transfer option increased their annual earnings by more than $2,000, suggesting that government support of measures to increase the use of interplant transfers should be considered.
The author is Professor of Economics, The University of Wisconsin, and Fulbright Fellow, 1971-72, Industrial Relations Research Unit, University of Warwick England. The author wishes to express his appreciation to the Center for Studies in Vocational and Technical Education and the Graduate School of the University of Wisconsin for their financial support of this inquiry; to the unknown referee for his well-taken criticisms of an earlier draft; and to his colleagues Arthur Goldberger for his econometric guidance and Lee Hansen, Eugene Smolensky, Gerald Somers, and Ken Smith for their helpful comments. He also wishes to acknowledge the competent assistance rendered by James Marketti, Research Assistant who meticulously supervised the coding of the original data, prepared the request for earnings data from the Social Security Administration, and performed the initial computations on the data; by Tom Kochan, Research Assistant, and Linda Werner, Programmer, who provided further assistance in the analysis; and by Wing Fai W. Tam, Programmer, who ran the final regressions, analyses of variance, and various tabulations. In addition, he wishes to express his appreciation for the assistance provided by the staff of the Social Security Administration in assembling the earnings data in a form suitable for analysis.
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