Layoffs and lemons over the business cycle
This paper develops a simple model in which unemployment arises from a combination of selection and bad luck. During recessions, the proportion of workers who are laid off due to low productivity declines during recessions, diminishing the adverse signaling effect of an unemployment spell. Wage regressions estimated using the Displaced Workers Supplement support this basic prediction of the model.
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References listed on IDEAS
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- Harry Krashinsky, 2002.
"Evidence on Adverse Selection and Establishment Size in the Labor Market,"
Cornell University, ILR School, vol. 56(1), pages 84-96, October.
- Harry Krashinsky, 2002. "Evidence on adverse selection and establishment size in the labor market," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(1), pages 84-96, October.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Rodriguez-Planas, N., 1998.
"Playing Hard to Get: Theory and Evidence on Layoffs, Recalls and Unemployment,"
86, Boston University - Industry Studies Programme.
- Nuria Rodriguez-Planas, 1998. "Playing Hard to Get: Theory and Evidence on Layoffs, Recalls and Unemployment," Papers 0086, Boston University - Industry Studies Programme.
- Gray, Jo Anna, 1976. "Wage indexation: A macroeconomic approach," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 221-235, April.
- Laing, Derek, 1994.
"Involuntary Layoffs in a Model with Asymmetric Information Concerning Worker Ability,"
Review of Economic Studies,
Wiley Blackwell, vol. 61(2), pages 375-92, April.
- Laing, D., 1990. "Involuntary Layoffs in a Model with Asymmetry Information Concerning Worker Ability," Papers 12-90-4, Pennsylvania State - Department of Economics.
- Gibbons, Robert & Katz, Lawrence F., 1991.
"Layoffs and Lemons,"
3442782, Harvard University Department of Economics.
- Robert Gibbons & Lawrence Katz, 1989. "Layoffs and Lemons," Working Papers 629, Princeton University, Department of Economics, Industrial Relations Section..
- Robert Gibbons & Lawrence Katz, 1989. "Layoffs and Lemons," NBER Working Papers 2968, National Bureau of Economic Research, Inc.
- Gibbons, R. & Katz, L.F., 1989. "Layoffs And Lemons," Working papers 531, Massachusetts Institute of Technology (MIT), Department of Economics.
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