Search Unemployment with Advance Notice
Abstract
This paper proposes and solves a search unemployment model in which job separation requires mandatory notice. When jobs are subject to idiosyncratic uncertainty, firms would issue advance notice even with good business conditions. We show that such precautionary policy is not pursued if it entails sufficiently high productivity losses. If workers can search on the job, an increase in advance notice increases job-to-job movements, reduces unemployment flows, and has ambiguous effects on equilibrium unemployment. Results are consistent with the fact the North American and European labor markets, despite their differences in job security provisions, experience similar turnover rates and dissimilar unemployment flows.Download Info
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Bibliographic Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2164.Length:
Date of creation: Jun 1999
Date of revision:
Handle: RePEc:cpr:ceprdp:2164
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Related research
Keywords: Advance Notice; Search Theory; Unemployment Flows;Other versions of this item:
- Garibaldi, Pietro, 2004. "Search Unemployment With Advance Notice," Macroeconomic Dynamics, Cambridge University Press, vol. 8(01), pages 51-75, February.
- Pietro Garibaldi, 1998. "Search Unemployment with Advance Notice," IMF Working Papers 98/119, International Monetary Fund.
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Boeri, Tito & Garibaldi, Pietro, 2002.
"Shadow Activity and Unemployment in a Depressed Labour Market,"
CEPR Discussion Papers
3433, C.E.P.R. Discussion Papers.
- Tito Boeri & Pietro Garibaldi, . "Shadow Activity and Unemployment in a Depressed Labor Market," Working Papers 177, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Sunde, Uwe, 2002. "Unobserved Bilateral Search on the Labor Market: A Theory-Based Correction for a Common Flaw in Empirical Matching Studies," IZA Discussion Papers 520, Institute for the Study of Labor (IZA).
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