Search Unemployment with Advance Notice
AbstractThis paper proposes and solves a search 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 unemployment. Results are consistent with the fact that North American and European labor markets, despite their differences in job security provisions, experience similar turnover rates and dissimilar unemployment flows.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 98/119.
Date of creation: 01 Aug 1998
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- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
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- NEP-ALL-2013-02-16 (All new papers)
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- Tito Boeri & Pietro Garibaldi, .
"Shadow Activity and Unemployment in a Depressed Labor Market,"
177, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Boeri, Tito & Garibaldi, Pietro, 2002. "Shadow Activity and Unemployment in a Depressed Labour Market," CEPR Discussion Papers 3433, C.E.P.R. Discussion Papers.
- 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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