Returns to Labor Mobility: Layoff Costs and Quit Turbulence

Lars Ljungqvist, Isaac Baley and Thomas Sargent

No 16370, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Although they are studied too rarely, returns to labor mobility transmit important forces that decisively shape outcomes in macro-labor models. By focusing on returns to labor mobility, this paper sheds new light on calibrations of influential macro-labor studies and resolves an issue about the turbulence-theoretic explanation of trans-Atlantic unemployment experiences. It does so by invoking a cross-phenomenon restriction -- in our case, how returns to labor mobility determine effects on unemployment of changes in layoff costs, on the one hand, and changes in quit turbulence, on the other hand. We also spotlight two distinct perspectives and associated sources of data: one from labor economics and another from the economics of industrial organization. Ultimately, we are reminded of the rule that new theories "must not throw out all the successes of former theories. ... to preserve the successes of the past is not only a constraint, but also a guide."

Keywords: Labor mobility; Quits; Turnover; Layoff cost; Turbulence; Unemployment; Human capital; Skills; Matching model; Search-island model (search for similar items in EconPapers)
JEL-codes: E24 J63 J64 (search for similar items in EconPapers)
Date: 2021-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16370 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Returns to labor mobility. Layoff costs and quit turbulence (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16370

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16370

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().