Virtually no one expects the unemployment rate to fall quickly, in part because a number of job seekers will need to retrain before getting another job. Perhaps no where is this more visible than Detroit, where automotive industry workers have been laid-off en masse.
Participants at the Automotive Communities and Work Force Adjustment conference looked into the problem and found, perhaps unsurprisingly, that those displaced workers who retrained in health care made more money than workers who retrained in other fields, according to the Chicago Fed Letter.
[Daniel Sullivan of the Chicago Fed] said his research shows that displaced workers who enrolled in healthcare-related and technical/professional courses experienced greater long-term impacts on future earnings…[Louis Jacobson of the Center for Naval Analyses] emphasised that course selection greatly affected the returns to education – largely in agreement with Sullivan that healthcare related and professional courses offered thehighest returns in terms of income.
How long does the retraining take?
Sullivan said displaced workers would need roughly three years of full-time studies at a community college to offset their earnings losses.
Three years is a long time – but it’s consistent with estimates that the output gap won’t fully close until 2013.
