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Advance Layoff Notices and Labor Market Forecasting

Pawel Krolikowski () and Kurt Lunsford

No 202003, Working Papers from Federal Reserve Bank of Cleveland

Abstract: We collect rich establishment-level data about advance layoff notices filed under the Worker Adjustment and Retraining Notification (WARN) Act since January 1990. We present in-sample evidence that the number of workers affected by WARN notices leads state-level initial unemployment insurance claims, changes in the unemployment rate, and changes in private employment. The effects are strongest at the one and two-month horizons. After aggregating state-level information to a national-level “WARN factor” using a dynamic factor model, we find that the factor substantially improves out-of-sample forecasts of changes of manufacturing employment in real time.

Keywords: initial UI claims.; mass layoffs; employment; unemployment; plant closings; WARN act (search for similar items in EconPapers)
JEL-codes: E27 J65 K31 (search for similar items in EconPapers)
Pages: 39
Date: 2020-01-31
New Economics Papers: this item is included in nep-for, nep-lab, nep-law and nep-mac
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DOI: 10.26509/frbc-wp-202003

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Handle: RePEc:fip:fedcwq:87416