Trends in Severance Pay Coverage in the United States, 1980-2001

48 Pages Posted: 26 Jan 2006

See all articles by John Bishow

John Bishow

Bureau of Labor Statistics

Donald O. Parsons

George Washington University; IZA Institute of Labor Economics

Date Written: May 2004


Major shocks to the labor market in the last two decades have raised concerns that workers, especially white-collar and service industry workers, have become increasingly vulnerable to costly job displacements. We construct annual estimates of private severance pay coverage for the last two decades, utilizing two Bureau of Labor Statistics data series - the Employee Benefits Surveys (EBS) and the Employment Cost Index (ECI) - to explore the implications of these changes on recent coverage trends. We find only modest evidence that employers have adjusted to this perception by expanding severance pay coverage. Although coverage has increased among administrative/professional workers in both the goods and service sectors and among clerical workers in the goods sector, it has declined among groups believed to be newly vulnerable to job displacement risk - workers in the service sector generally, and especially clerical/sales workers.

Keywords: Severance Pay, Job Displacement, Unemployment Insurance

JEL Classification: J65, J32, J33

Suggested Citation

Bishow, John and Parsons, Donald O., Trends in Severance Pay Coverage in the United States, 1980-2001 (May 2004). Available at SSRN: or

John Bishow

Bureau of Labor Statistics ( email )

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Washington, DC 20212
United States

Donald O. Parsons (Contact Author)

George Washington University ( email )

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Washington, DC 20052
United States

IZA Institute of Labor Economics

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