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The Recall and New Job Search of Laid-Off Workers: A Bivariate Proportional Hazard Model with Unobserved Heterogeneity

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Author Info

  • Bruce Fallick

    (Federal Reserve Board)

  • Keunkwan Ryu

    (School of Economics, Seoul National University)

Abstract

Workers who lose their jobs can become reemployed either by being recalled to their previous employers or by finding new jobs. Workers' chances for recall should depress their job search intensity, so the rates of exit from unemployment by these two routes should be negatively related. We look for evidence in the PSID data by estimating a semiparametric competing risks model with explicitly related hazards. Our estimates reveal a statistically precise but small negative effect of recall probabilities on the rate of new job finding. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 89 (2007)
Issue (Month): 2 (May)
Pages: 313-323

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Handle: RePEc:tpr:restat:v:89:y:2007:i:2:p:313-323

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  1. Lippman, Steven A & McCall, John J, 1976. "The Economics of Job Search: A Survey: Part I," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 14(2), pages 155-89, June.
  2. Lawrence F. Katz & Bruce D. Meyer, 1988. "Unemployment Insurance, Recall Expectations, And Unemployment Outcomes," NBER Working Papers 2594, National Bureau of Economic Research, Inc.
  3. Fallick, Bruce Chelimsky, 1991. "Unemployment Insurance and the Rate of Re-employment of Displaced Workers," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 73(2), pages 228-35, May.
  4. McCall, Brian P, 1996. "Unemployment Insurance Rules, Joblessness, and Part-Time Work," Econometrica, Econometric Society, Econometric Society, vol. 64(3), pages 647-82, May.
  5. Lippman, Steven A & McCall, John J, 1976. "The Economics of Job Search: A Survey," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 14(3), pages 347-68, September.
  6. Lawrence F. Katz, 1986. "Layoffs, Recall and the Duration of Unemployment," NBER Working Papers 1825, National Bureau of Economic Research, Inc.
  7. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, American Economic Association, vol. 76(4), pages 604-20, September.
  8. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, Econometric Society, vol. 52(2), pages 271-320, March.
  9. Han, Aaron & Hausman, Jerry A, 1990. "Flexible Parametric Estimation of Duration and Competing Risk Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 5(1), pages 1-28, January-M.
  10. Sueyoshi, Glenn T., 1992. "Semiparametric proportional hazards estimation of competing risks models with time-varying covariates," Journal of Econometrics, Elsevier, Elsevier, vol. 51(1-2), pages 25-58.
  11. Idson, Todd L & Valletta, Robert G, 1996. "Seniority, Sectoral Decline, and Employee Retention: An Analysis of Layoff Unemployment Spells," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 14(4), pages 654-76, October.
  12. Anderson, Patricia M, 1992. "Time-Varying Effects of Recall Expectation, a Reemployment Bonus, and Job Counseling on Unemployment Durations," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 10(1), pages 99-115, January.
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Cited by:
  1. René Böheim, 2006. "“I’ll be Back” – Austrian Recalls," Empirica, Springer, Springer, vol. 33(1), pages 1-18, March.
  2. Bruce Fallick & John Haltiwanger & Erika McEntarfer, 2012. "Job-to-job flows and the consequences of job separations," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2012-73, Board of Governors of the Federal Reserve System (U.S.).

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