Displacement, Signaling, and Recall Expectations
AbstractThis paper is the first to present empirical evidence consistent with models of signaling through unemployment and to uncover a new stylized fact using the 1988-2006 DWS, namely that, among white-collar workers, post-displacement earnings fall less rapidly with unemployment spells for layoffs than for plant closings. Because high-productivity workers are more likely to be recalled than low-productivity ones, they may choose to signal their productivity though unemployment, in which case the duration of unemployment may be positively related to post-displacement wages. Identification is done using workers whose plant closed as they cannot be recalled, and no incentives to signal arise.
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Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 550.
Date of creation: Apr 2011
Date of revision:
Asymmetric information; laid-off workers; recalls; unemployment; and wages;
Find related papers by JEL classification:
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
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