Job loss is painful. There are thousands of individual stories of workers who lose their jobs each year from all parts of the world. A great deal of work across the social sciences examines the causes and consequences of job loss. This chapter addresses a small part of that work and specifically focuses on the effects of job loss on workers (including the effects on subsequent wages and on health) and on the effects of job loss on companies (including short- and longer-run corporate performance). Other questions are also considered, such as whether firms are less committed to workers and workers less committed to firms than they were in the recent past. A variety of data sources are accessed for research on job loss, and consideration is given to the alternatives to job loss and the various public policies adopted in the United States and throughout the world.

To begin, it should be noted that this chapter will not focus on other important issues related to job loss. It will not examine, in significant detail, the effects of international trade or tariffs. The chapter is also not about labor turnover that is initiated by the worker. Voluntary quits and separations are not discussed, nor are firings for cause or strictly for performance.

The chapter examines instances where companies layoff employees (temporarily or permanently, although the focus is on the latter). It examines changes in the displacement of workers over time, reasons for the changes, and the effects on workers and companies. There is also a focus on policies, consideration being given as to whether there can be improvements to what is known and done about job loss, and a discussion of how other countries handle reductions in the demand for labor.