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Search Unemployment With Advance Notice

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  • GARIBALDI, PIETRO

Abstract

This paper studies the effects of employment protection legislation when job separation requires a mandatory advance notice or a firm's costly closure. In a tight labor market, firms use mandatory notice since job-to-job transitions reduce the expected firing costs. In a world without the lengthy procedure imposed by advance notice, job turnover is mainly accommodated by unemployment inflows. As notice length increases, the fraction of job turnover accounted for by job-to-job movements increases. These results are consistent with the fact that the North American and European markets, despite their difference in employment protection legislation, have different unemployment flows but similar job flows.

Suggested Citation

  • Garibaldi, Pietro, 2004. "Search Unemployment With Advance Notice," Macroeconomic Dynamics, Cambridge University Press, vol. 8(1), pages 51-75, February.
    • Handle: RePEc:cup:macdyn:v:8:y:2004:i:01:p:51-75_02
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    Cited by:

    1. Tito Boeri & Pietro Garibaldi, "undated". "Shadow Activity and Unemployment in a Depressed Labor Market," Working Papers 177, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    2. Simmons, Michael, 2023. "Job-to-job transitions, job finding and the ins of unemployment," Labour Economics, Elsevier, vol. 80(C).
    3. 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 of Labor Economics (IZA).

    More about this item

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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