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Recall Expectations and Duration Dependence

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  • Arash Nekoei
  • Andrea Weber

Abstract

Using novel administrative data from Austria, we investigate the nature of temporary layoffs and recalls. We find that on average jobs ending in temporary layoffs lasted shorter but paid higher wages. The majority of temporarily laid-off workers return to their previous employer, but also one-fifth of those permanently laid-off are recalled. Compared to job switchers, recalls have shorter unemployment spells and do not experience wage losses. Negative duration dependence of unemployment only appears once recall exits are excluded for temporary and permanent layoffs. However, for temporary layoffs, the aggregate pattern masks significant heterogeneity by pre-unemployment tenure. Additional survey evidence suggests a lower average search level for temporary layoffs.

Suggested Citation

  • Arash Nekoei & Andrea Weber, 2015. "Recall Expectations and Duration Dependence," American Economic Review, American Economic Association, vol. 105(5), pages 142-146, May.
  • Handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:142-46
    Note: DOI: 10.1257/aer.p20151064
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    References listed on IDEAS

    as
    1. Arash Nekoei & Andrea Weber, 2017. "Does Extending Unemployment Benefits Improve Job Quality?," American Economic Review, American Economic Association, vol. 107(2), pages 527-561, February.
    2. Emilia Del Bono & Andrea Weber, 2008. "Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria," Journal of Labor Economics, University of Chicago Press, vol. 26, pages 181-221.
    3. Lawrence F. Katz, 1986. "Layoffs, Recall and the Duration of Unemployment," NBER Working Papers 1825, National Bureau of Economic Research, Inc.
    4. Alfred Stiglbauer & Florian Stahl & Rudolf Winter-Ebmer & Josef Zweimüller, 2003. "Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(2), pages 127-148, June.
    5. Feldstein, Martin S, 1976. "Temporary Layoffs in the Theory of Unemployment," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 937-957, October.
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    Citations

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    Cited by:

    1. Altmann, Steffen & Falk, Armin & Jäger, Simon & Zimmermann, Florian, 2018. "Learning about job search: A field experiment with job seekers in Germany," Journal of Public Economics, Elsevier, vol. 164(C), pages 33-49.
    2. repec:wfo:monber:y:2018:i:11:p:799-810 is not listed on IDEAS
    3. Gürtzgen, Nicole & Diegmann (né Nolte), André & Pohlan, Laura & van den Berg, Gerard J., 2018. "Do digital information technologies help unemployed job seekers find a job? Evidence from the broadband internet expansion in Germany," Working Paper Series 2018:21, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Rainer Eppel & Thomas Horvath & Helmut Mahringer, 2017. "Die Auswirkungen temporärer Layoffs auf die weitere Erwerbskarriere der betroffenen Arbeitskräfte," WIFO Working Papers 539, WIFO.
    5. Lachowska, Marta & Meral, Merve & Woodbury, Stephen A., 2016. "Effects of the unemployment insurance work test on long-term employment outcomes," Labour Economics, Elsevier, vol. 41(C), pages 246-265.
    6. repec:wfo:wstudy:61245 is not listed on IDEAS
    7. Kyyrä, Tomi & Pesola, Hanna & Rissanen, Aarne, 2017. "Unemployment Insurance in Finland: A Review of Recent Changes and Empirical Evidence on Behavioral Responses," Research Reports 184, VATT Institute for Economic Research.
    8. Bernardus Van Doornik & David Schoenherr & Janis Skrastins, 2018. "Unemployment Insurance, Strategic Unemployment and Firm-Worker Collusion," Working Papers Series 483, Central Bank of Brazil, Research Department.
    9. Stefano DellaVigna & Attila Lindner & Balázs Reizer & Johannes F. Schmieder, 2017. "Reference-Dependent Job Search: Evidence from Hungary," The Quarterly Journal of Economics, Oxford University Press, vol. 132(4), pages 1969-2018.
    10. Rainer Eppel & Thomas Horvath & Helmut Mahringer & Christine Zulehner, 2015. "Temporäre Layoffs – Das kurzfristige Aussetzen von Arbeitsverhältnissen und seine Bedeutung für die Arbeitslosigkeit," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(12), pages 885-897, December.
    11. Andreas Gulyas, 2018. "Identifying Labor Market Sorting with Firm Dynamics," 2018 Meeting Papers 856, Society for Economic Dynamics.

    More about this item

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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