• Rachel Lipson

The Search for Stability: A Review of Worker Transitions

Rachel Lipson and David Deming (et al.) author new report on worker transitions in the US

Key Points

  • Even before the pandemic, the US economy faced decades of structural and technological changes, causing disproportionate disruption and dislocation to workers without college degrees.

  • Compared to the rest of the developed world, the US has underinvested in active labor market programs. The US is also unique in its focus on workers who have lost jobs due to trade, rather than other sources of job loss.

  • The policy tool kit in the US has largely been designed for more cyclical ebbs and flows in the economy rather than more dramatic shifts; most programs were designed for an earlier era.

  • To counter both macro shocks and the unequal effects of technological change, future investments must address transitioning workers’ capital constraints, provide comprehensive and holistic supports, and build both transferable and job-specific skills.

"The United States currently faces its most significant economic crisis of a generation, but employment insecurity has been a persistent feature of the American labor force for decades...

This report begins by outlining the key shifts affecting worker displacement in the US. Even before the COVID-19 crisis, ongoing structural changes in the economy posed major challenges to the job stability of a large subset of workers in the country. The share of manufacturing employment in the United States has fallen over time, due to a combination of trade, technological change, declining productivity growth, and relative declines in product demand for manufactured goods. The fastest-growing jobs require both technical and social skills. The COVID-19 crisis has wrecked additional havoc on the labor market, disrupting large shares of employment in whole industries and occupations..."


Read the full report at aei.org

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