Given the importance of recall to previous employer in the United States, I provide both theoretical and empirical analyses of an asymmetric information model with an endogenous layoff-rehire process. I show that taking into account the possibility of recalls has important implications for the study of post-displacement earnings and unemployment duration of laid-off workers in the US. I find that high-productivity laid-off workers may choose unemployment over a low paid job, even though they may not be recalled.
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Paper provided by Boston University - Industry Studies Programme in its series Papers with number
86.
Find related papers by JEL classification: J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General