Signaling in The Labor Market: New Evidence On Layoffs, and Plant Closings

Núria Rodriguez-Planas

William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: In my asymmetric -information model of layoffs, high-productivity workers are more likely to be recalled to their former employer and may choose to remain unemployed rather than to accept a low-wage job. In this case, unemployment can serve as a signal of productivity, and duration of unemployment may be positively related to post-laid-off wages even among workers who are not recalled. In contrast, because workers whose plant closed cannot be recalled, longer unemployment for them should not have a positive signaling benefit. Analysis of the data from the January 1988-2000 Displaced Workers Supplements to the Current Population Survey reveals that the wage/unemployment duration relation differs between laid-off workers and workers displaced through plant closings in the predicted way, and finds evidence consistent with asymmetric information in the U.S. labor market.

Keywords: laid-off workers; signaling; unemployment; and wages (search for similar items in EconPapers)
JEL-codes: J30 J60 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2003-09-01
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp610.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp610.pdf [302 Found]--> https://wdi.umich.edu/files/Publications/WorkingPapers/wp610.pdf)

Related works:
Working Paper: Signaling in the Labor Market: New Evidence on Layoffs and Plant Closings (2004)
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:wdi:papers:2003-610

Access Statistics for this paper

More papers in William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109. Contact information at EDIRC.
Bibliographic data for series maintained by WDI ().