Re-employment after retrenchment: evidence from the TCF industry study

Industry Commission inquiries into the passenger motor vehicle and textiles clothing and footwear (TCF) industries have focused attention on the employment prospects of workers who are displaced as a result of structural change. The fact that older and less skilled workers face considerable difficulty finding new employment is now widely recognised. In this paper we examine the post-retrenchment outcomes for workers retrenched from jobs in the TCF sector. The method of analysis— discrete-time event history analysis—improves on previous studies of post-retrenchment outcomes because labour market conditions are incorporated into the statistical model, redressing the over-emphasis on supply-side issues that characterise previous research. The analysis shows that local and national labour market conditions are important determinants of employment outcomes. Personal characteristics, household circumstances and ascribed skill are also important as employers use these attributes to filter potential recruits. The analysis suggests that the utility of retraining is variable, enhancing the employability of workers with the best prospects (based on their personal characteristics and skills) before taking up retraining but decreasing the employment chances of those with poorer prospects.