Layoffs and Lemons
AbstractThe authors provide theoretical and empirical analyses of an asymmetric-information model of layoffs. When firms have discretion with respect to whom to lay off, the market infers that laid-off workers are of low ability. Assuming that no such negative inference is warranted if workers are displaced in a plant closing, postdisplacement wages should be lower and postdisplacement unemployment spells should be longer for those displaced by layoffs than for those displaced by plant closings, but predisplacement wages should not differ by cause of displacement. Evidence on displaced workers from Current Population Surveys supports all three of the model's predictions. Copyright 1991 by University of Chicago Press.
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Bibliographic InfoPaper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 629.
Date of creation: Apr 1989
Date of revision:
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Postal: Firestone Library, Princeton, New Jersey 08544-2098
Phone: 609 258-4041
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Web page: http://www.irs.princeton.edu/
More information through EDIRC
layoffs; unemployment; wages; asymmetric information; displaced workers;
Other versions of this item:
- Gibbons, Robert & Katz, Lawrence F., 1991. "Layoffs and Lemons," Scholarly Articles 3442782, Harvard University Department of Economics.
- Gibbons, R. & Katz, L.F., 1989. "Layoffs And Lemons," Working papers 531, Massachusetts Institute of Technology (MIT), Department of Economics.
- Robert Gibbons & Lawrence Katz, 1991. "Layoffs and Lemons," NBER Working Papers 2968, National Bureau of Economic Research, Inc.
- G2 - Financial Economics - - Financial Institutions and Services
- G20 - Financial Economics - - Financial Institutions and Services - - - General
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Will Today's Unemployed Become Tommorow's Unemployable?
by Catherine Rampell in Economix on 2010-12-02 15:34:00
by himaginary in himaginaryの日記 on 2010-12-15 08:00:00
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