Temporary Layoffs, Loss-of-Recall, and Cyclical Unemployment Dynamics

Mark Gertler, Christopher Huckfledt and Antonella Trigari ()

No 17376, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We revisit the role of temporary layoffs in the business cycle. While some have emphasized a stabilizing effect due to recall hiring, we quantify from the data an important countercyclical destabilizing effect due to “loss-of-recall†, whereby workers in temporary-layoff unemployment lose their job permanently. We develop a quantitative model allowing for endogenous flows of workers across employment and both temporary-layoff and jobless unemployment. The model captures both pre- and post-pandemic unemployment dynamics, including the recessionary role of loss-of-recall. We use our structural model to show that the Paycheck Protection program generated sizable employment gains, in part by significantly reducing loss-of-recall.

Keywords: Temporary layoffs; Recalls; Loss-of-recall; Unemployment; Business cycles (search for similar items in EconPapers)
Date: 2022-06
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Related works:
Working Paper: Temporary Layoffs, Loss-of-Recall, and Cyclical Unemployment Dynamics (2022)
Working Paper: Temporary Layoffs, Loss-of-Recall and Cyclical Unemployment Dynamics (2022)
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