Labour market outcomes among retrenched workers in Australia: a review

In any one year perhaps 5% of the Australian workforce experiences retrenchment. Retrenchment causes people shock and loss of income; they become socially isolated and their psychological health deteriorates. Many studies have examined the subsequent labour force experience of retrenched workers, in terms of conditions in the labour market, retrenchment and hiring practices, state policies and the personal characteristics of the workers. This paper reviews evidence about the factors that influence the prospects of retrenched workers, identifies some flaws in the design of studies in which that evidence has been collected, and points to ways in which more comprehensive evidence can be collected. An informed interpretation of evidence requires appropriate methods for identifying cause and effect, should rest on a clear identification of the forms of employment that exist, and needs to be sensitive to the manner in which personal characteristics are used by employers as hiring markers.