Playing Hard to Get: Theory and Evidence on Layoffs, Recalls, and Unemployment

Núria Rodriguez-Planas

A chapter in New Analyses of Worker Well-Being, 2014, vol. 38, pp 211-258 from Emerald Group Publishing Limited

Abstract: This paper is the first to present empirical evidence consistent with models of signaling through unemployment and to uncover a new stylized fact using the 1988–2006 Displaced Worker Supplement (DWS) of the Current Population Survey (CPS), namely that, among white-collar workers, post-displacement earnings fall less rapidly with unemployment spells for layoffs than for plant closings. Because high-productivity workers are more likely to be recalled than low-productivity ones, they may choose to signal their productivity though unemployment, in which case the duration of unemployment may be positively related to post-displacement wages. Identification is done using workers whose plant closed as they cannot be recalled, and no incentives to signal arise.

Keywords: Asymmetric information; laid-off workers; recalls; unemployment; wages; J60; J30 (search for similar items in EconPapers)
Date: 2014
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Related works:
Working Paper: Playing Hard to Get: Theory and Evidence on Layoffs, Recalls and Unemployment (1998)
Working Paper: Playing Hard to Get: Theory and Evidence on Layoffs, Recalls and Unemployment (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rleczz:s0147-9121(2013)0000038007

DOI: 10.1108/S0147-9121(2013)0000038007

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